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1040 ez free Publication 4492-B - Main Content Table of Contents DefinitionsMidwestern Disaster Areas Applicable Disaster Date Charitable Giving IncentivesTemporary Suspension of Limits on Charitable Contributions Standard Mileage Rate for Charitable Use of Vehicles Mileage Reimbursements to Charitable Volunteers Casualty and Theft LossesTime limit for making election. 1040 ez free Replacement Period for Nonrecognition of Gain Net Operating Losses IRAs and Other Retirement PlansDefinitions Taxation of Qualified Disaster Recovery Assistance Distributions Repayment of Qualified Disaster Recovery Assistance Distributions Repayment of Qualified Distributions for the Purchase or Construction of a Main Home Loans From Qualified Plans Additional Tax Relief for IndividualsEarned Income Credit and Child Tax Credit Additional Exemption for Housing Individuals Displaced by the Severe Storms, Tornadoes, or Flooding Education Credits Recapture of Federal Mortgage Subsidy Exclusion of Certain Cancellations of Indebtedness by Reason of the Severe Storms, Tornadoes, or Flooding Tax Relief for Temporary Relocation Additional Tax Relief for BusinessesEmployee Retention Credit Employer Housing Credit and Exclusion Demolition and Clean-up Costs Increase in Rehabilitation Tax Credit Request for Copy or Transcript of Tax Return How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). 1040 ez free Definitions The following definitions are used throughout this publication. 1040 ez free Midwestern Disaster Areas A Midwestern disaster area is an area for which a major disaster was declared by the President during the period beginning on May 20, 2008, and ending on July 31, 2008, in the state of Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, or Wisconsin, as a result of severe storms, tornadoes, or flooding that occurred on the applicable disaster date. 1040 ez free See Tables 1 and 2 for a list of the counties included in the Midwestern disaster areas. 1040 ez free Applicable Disaster Date The term “applicable disaster date” as used in this publication, refers to the date on which the severe storms, tornadoes, or flooding occurred in the Midwestern disaster areas. 1040 ez free You will need to know this date when using this publication for the various tax provisions. 1040 ez free Table 1 The counties listed in Table 1 below are eligible for all tax provisions shown in this publication. 1040 ez free Applicable Disaster Dates* State Affected Counties—Midwestern Disaster Areas 05/02/2008through05/12/2008 Arkansas Arkansas, Benton, Cleburne, Conway, Crittenden, Grant, Lonoke, Mississippi, Phillips, Pulaski, Saline, and Van Buren. 1040 ez free 06/01/2008through07/22/2008 Illinois Adams, Calhoun, Clark, Coles, Crawford, Cumberland, Douglas, Edgar, Hancock, Henderson, Jasper, Jersey, Lake, Lawrence, Mercer, Rock Island, Whiteside, and Winnebago. 1040 ez free 05/30/2008through06/27/2008 Indiana Adams, Bartholomew, Brown, Clay, Daviess, Dearborn, Decatur, Gibson, Grant, Greene, Hamilton, Hancock, Hendricks, Henry, Huntington, Jackson, Jefferson, Jennings, Johnson, Knox, Lawrence, Madison, Marion, Monroe, Morgan, Owen, Parke, Pike, Posey, Putnam, Randolph, Ripley, Rush, Shelby, Sullivan, Tippecanoe, Vermillion, Vigo, Washington, and Wayne. 1040 ez free 05/25/2008through08/13/2008 Iowa Adair, Adams, Allamakee, Appanoose, Audubon, Benton, Black Hawk, Boone, Bremer, Buchanan, Butler, Cass, Cedar, Cerro Gordo, Chickasaw, Clarke, Clayton, Clinton, Crawford, Dallas, Davis, Decatur, Delaware, Des Moines, Dubuque, Fayette, Floyd, Franklin, Fremont, Greene, Grundy, Guthrie, Hamilton, Hancock, Hardin, Harrison, Henry, Howard, Humboldt, Iowa, Jackson, Jasper, Johnson, Jones, Keokuk, Kossuth, Lee, Linn, Louisa, Lucas, Madison, Mahaska, Marion, Marshall, Mills, Mitchell, Monona, Monroe, Montgomery, Muscatine, Page, Polk, Pottawattamie, Poweshiek, Ringgold, Scott, Story, Tama, Union, Van Buren, Wapello, Warren, Washington, Webster, Winnebago, Winneshiek, Worth, and Wright. 1040 ez free 05/10/2008through05/11/2008 Missouri Barry, Jasper, and Newton. 1040 ez free 06/01/2008through08/13/2008 Missouri Adair, Andrew, Callaway, Cass, Chariton, Clark, Gentry, Greene, Harrison, Holt, Johnson, Lewis, Lincoln, Linn, Livingston, Macon, Marion, Monroe, Nodaway, Pike, Putnam, Ralls, St. 1040 ez free Charles, Stone, Taney, Vernon, and Webster. 1040 ez free 05/22/2008through06/24/2008 Nebraska Buffalo, Butler, Colfax, Custer, Dawson, Douglas, Gage, Hamilton, Holt, Jefferson, Kearney, Lancaster, Platte, Richardson, Sarpy, and Saunders. 1040 ez free 06/05/2008through07/25/2008 Wisconsin Adams, Calumet, Crawford, Columbia, Dane, Dodge, Fond du Lac, Grant, Green, Green Lake, Iowa, Jefferson, Juneau, Kenosha, La Crosse, Manitowoc, Marquette, Milwaukee, Monroe, Ozaukee, Racine, Richland, Rock, Sauk, Sheboygan, Vernon, Walworth, Washington, Waukesha, and Winnebago. 1040 ez free *For more details, go to www. 1040 ez free fema. 1040 ez free gov Table 2 The counties listed in Table 2 below are eligible for all of the special tax provisions shown in this publication except the following. 1040 ez free Charitable Giving Incentives. 1040 ez free Net Operating Losses. 1040 ez free Education Credits. 1040 ez free Recapture of Federal Mortgage Subsidy. 1040 ez free Tax Relief for Temporary Relocation. 1040 ez free Employee Retention Credit. 1040 ez free Employer Housing Credit and Exclusion. 1040 ez free Demolition and Clean-up Costs. 1040 ez free Increase in Rehabilitation Credit. 1040 ez free Applicable Disaster Dates* State Affected Counties—Midwestern Disaster Areas 06/01/2008through07/22/2008 Illinois Greene, Madison, Monroe, Pike, Randolph, St. 1040 ez free Clair, and Scott. 1040 ez free 05/30/2008through06/27/2008 Indiana Benton, Boone, Fountain, Franklin, Jay, Montgomery, Ohio, Switzerland, Union, and Wabash. 1040 ez free 05/25/2008through08/13/2008 Iowa Carroll, Cherokee, Lyon, Palo Alto, Pocahontas, Taylor, and Wayne. 1040 ez free 05/22/2008through06/16/2008 Kansas Barber, Barton, Bourbon, Brown, Butler, Chautauqua, Cherokee, Clark, Clay, Comanche, Cowley, Crawford, Decatur, Dickinson, Edwards, Elk, Ellis, Ellsworth, Franklin, Gove, Graham, Harper, Haskell, Hodgeman, Jackson, Jewell, Kingman, Kiowa, Lane, Linn, Logan, Mitchell, Montgomery, Ness, Norton, Osborne, Pawnee, Phillips, Pratt, Reno, Republic, Riley, Rooks, Rush, Saline, Seward, Sheridan, Smith, Stafford, Sumner, Thomas, Trego, Wallace, and Wilson. 1040 ez free 06/06/2008through06/13/2008 Michigan Allegan, Barry, Eaton, Ingham, Lake, Manistee, Mason, Missaukee, Osceola, Ottawa, Saginaw, and Wexford. 1040 ez free 06/06/2008through06/12/2008 Minnesota Cook, Fillmore, Freeborn, Houston, Mower, and Nobles. 1040 ez free 06/01/2008through08/13/2008 Missouri Atchison, Audrain, Bates, Buchanan, Cape Girardeau, Carroll, Christian, Daviess, Grundy, Howard, Jefferson, Knox, Mercer, Miller, Mississippi, Morgan, New Madrid, Pemiscot, Perry, Pettis, Platte, Polk, Randolph, Ray, Saline, Schuyler, Scotland, Shelby, St. 1040 ez free Genevieve, St. 1040 ez free Louis, the Independent City of St. 1040 ez free Louis, Scott, Sullivan, and Worth. 1040 ez free 04/23/2008through04/26/2008 Nebraska Gage, Johnson, Morrill, Nemaha, and Pawnee. 1040 ez free 05/22/2008through06/24/2008 Nebraska Adams, Blaine, Boone, Boyd, Brown, Burt, Cass, Chase, Cherry, Cuming, Dundy, Fillmore, Frontier, Furnas, Garfield, Gosper, Greeley, Hall, Hayes, Howard, Johnson, Keya Paha, Lincoln, Logan, Loup, Merrick, McPherson, Morrill, Nance, Nemaha, Otoe, Phelps, Polk, Red Willow, Rock, Saline, Seward, Sherman, Stanton, Thayer, Thomas, Thurston, Valley, Webster, Wheeler, and York. 1040 ez free 06/27/2008 Nebraska Dodge, Douglas, Sarpy, and Saunders. 1040 ez free 06/05/2008through07/25/2008 Wisconsin Lafayette. 1040 ez free * For more details, go to www. 1040 ez free fema. 1040 ez free gov Charitable Giving Incentives Temporary Suspension of Limits on Charitable Contributions This benefit applies only to the counties in Table 1. 1040 ez free Individuals. 1040 ez free   Qualified contributions are not subject to the overall limit on itemized deductions or the 50% of adjusted gross income (AGI) limit. 1040 ez free A qualified contribution is a charitable contribution paid in cash or by check to a 50% limit organization if you make an election to have the 50% limit not apply to these contributions. 1040 ez free   A qualified contribution must also meet all of the following requirements. 1040 ez free Be paid after May 1, 2008, and before January 1, 2009. 1040 ez free The contribution must be for relief efforts in one or more Midwestern disaster areas. 1040 ez free Documentation must be provided by the donee organization that the contribution was used (or will be used) for relief efforts in one or more Midwestern disaster areas. 1040 ez free   Your deduction for qualified contributions is limited to your AGI minus your deduction for all other charitable contributions. 1040 ez free You can carry over any contributions you are not able to deduct for 2008 because of this limit. 1040 ez free In 2009, the carryover of your unused qualified contributions is subject to the 50% of AGI limit. 1040 ez free Exception. 1040 ez free   Qualified contributions do not include contributions to certain private foundations described in section 509(a)(3) or contributions for the establishment of a new, or maintenance of an existing, donor advised fund. 1040 ez free Corporations. 1040 ez free   A corporation can elect to deduct qualified cash contributions without regard to the 10% of taxable income limit if the contributions were paid after May 1, 2008, and before January 1, 2009, to a qualified charitable organization (other than certain private foundations described in section 509(a)(3) or contributions for the establishment of a new, or maintenance of an existing, donor advised fund), for relief efforts in one or more Midwestern disaster areas. 1040 ez free Documentation must be provided by the donee organization that the contribution was used (or will be used) for relief efforts in one or more Midwestern disaster areas. 1040 ez free The corporation's deduction for these qualified contributions is limited to 100% of taxable income (as modified for the 10% limit) minus the corporation's deduction for all other charitable contributions. 1040 ez free Any qualified contributions over this limit can be carried over to the next 5 years, subject to the 10% of taxable income limit. 1040 ez free Partners and shareholders. 1040 ez free   Each partner in a partnership and each shareholder in an S corporation must make a separate election to have the appropriate limit not apply. 1040 ez free More information. 1040 ez free   For more information, see Publication 526 or Publication 542, Corporations. 1040 ez free Publication 526 includes a worksheet you can use to figure your deduction if any limits apply to your charitable contributions. 1040 ez free Standard Mileage Rate for Charitable Use of Vehicles This benefit applies only to the counties in Table 1. 1040 ez free The following are special standard mileage rates in effect for 2008 for the cost of operating your vehicle for providing charitable services related only to the severe storms, tornadoes, or flooding. 1040 ez free 36 cents per mile for the period beginning on the applicable disaster date through June 30, 2008. 1040 ez free 41 cents per mile for the period July 1 through December 31, 2008. 1040 ez free Mileage Reimbursements to Charitable Volunteers This benefit applies only to the counties in Table 1. 1040 ez free You can exclude from income amounts you receive as mileage reimbursements for the use of a private passenger vehicle for the benefit of a qualified charitable organization in providing relief related to the severe storms, tornadoes, or flooding during the period beginning on the applicable disaster date, and ending on December 31, 2008. 1040 ez free You cannot claim a deduction or credit for amounts you exclude. 1040 ez free You must keep records of miles driven, time, place (or use), and purpose of the mileage. 1040 ez free The amount you can exclude cannot exceed the standard business mileage rate (shown below) for expenses incurred during the following periods. 1040 ez free 50. 1040 ez free 5 cents per mile for the period beginning on the applicable disaster date through June 30, 2008. 1040 ez free 58. 1040 ez free 5 cents per mile for the period July 1 through December 31, 2008. 1040 ez free Casualty and Theft Losses This benefit applies to the counties in both Tables 1 and 2. 1040 ez free The following paragraphs explain changes to casualty and theft losses that were caused by the severe storms, tornadoes, or flooding in the Midwestern disaster areas. 1040 ez free For more information, see Publication 547. 1040 ez free Limits on personal casualty or theft losses. 1040 ez free   Losses of personal use property that arose in a Midwestern disaster area on or after the applicable disaster date are not subject to the $100 or 10% of AGI limits. 1040 ez free Qualifying losses include losses from casualties and thefts that arose in a Midwestern disaster area that were attributable to the severe storms, tornadoes, or flooding. 1040 ez free When completing Form 4684, do not include on line 17 any losses that arose in a Midwestern disaster area. 1040 ez free A loss arising in a Midwestern disaster area is not considered a loss attributable to a federally declared disaster for purposes of that line and cannot be added to your standard deduction. 1040 ez free When to deduct the loss. 1040 ez free   Casualty and theft losses are generally deductible only in the year the casualty occurred or the theft was discovered. 1040 ez free However, you can elect to deduct losses caused by the severe storms, tornadoes, or flooding on your return for the prior year. 1040 ez free Special instructions for individuals who elect to claim a Midwestern disaster area casualty or theft loss for 2007. 1040 ez free   Individuals filing or amending their 2007 tax return for casualty or theft losses that were attributable to the severe storms, tornadoes, or flooding should: Enter “Midwestern Disaster Area” at the top of Form 1040 or Form 1040X, and Complete the 2008 version of Form 4684. 1040 ez free Cross out “2008” and enter “2007” at the top of Form 4684. 1040 ez free Time limit for making election. 1040 ez free   You must make this election to claim your casualty or theft loss in 2007 by the later of the following dates. 1040 ez free The due date (without extensions) for filing your 2008 income tax return. 1040 ez free The due date (with extensions) for filing your 2007 income tax return. 1040 ez free Example. 1040 ez free If you are a calendar year individual taxpayer, you have until April 15, 2009, to amend your 2007 tax return to claim a casualty or theft loss that occurred during 2008. 1040 ez free Replacement Period for Nonrecognition of Gain This benefit applies to the counties in both Tables 1 and 2. 1040 ez free Generally, an involuntary conversion occurs when property is damaged, destroyed, stolen, seized, requisitioned, or condemned, and you receive other property or money in payment, such as insurance or a condemnation award. 1040 ez free Generally, you do not have to report a gain (if any) if you replace the property within 2 years (4 years for a main home in a federally declared disaster area). 1040 ez free However, for property that was involuntarily converted on or after the applicable disaster date, as a result of the severe storms, tornadoes, or flooding, a 5-year replacement period applies if substantially all of the use of the replacement property is in a Midwestern disaster area. 1040 ez free For more information, see the Instructions for Form 4684. 1040 ez free Net Operating Losses This benefit applies only to the counties in Table 1. 1040 ez free Qualified disaster recovery assistance loss. 1040 ez free   Generally, you can carry a net operating loss (NOL) back to the 2 tax years before the NOL year. 1040 ez free However, the portion of an NOL that is a qualified disaster recovery assistance loss can be carried back to the 5 tax years before the NOL year. 1040 ez free In addition, the 90% limit on the alternative tax NOL deduction (ATNOLD) does not apply to such portion of the ATNOLD. 1040 ez free   A qualified disaster recovery assistance loss is the smaller of: The excess of the NOL for the year over the specified liability loss for the year to which a 10-year carryback applies, or The total of the following deductions (to the extent they are taken into account in computing the NOL for the tax year): Qualified disaster recovery assistance casualty loss (as defined below), Moving expenses paid or incurred on or after the applicable disaster date, and before January 1, 2011, for the employment of an individual whose main home was in a Midwestern disaster area before the applicable disaster date, who was unable to remain in that home because of the severe storms, tornadoes, or flooding, and whose main job location (after the move) is in a Midwestern disaster area, Temporary housing expenses paid or incurred on or after the applicable disaster date, and before January 1, 2011, to house employees of the taxpayer whose main job location is in a Midwestern disaster area, Depreciation or amortization allowable for any qualified disaster recovery assistance property (even if you elected not to claim the special disaster recovery assistance depreciation allowance for such property) for the year placed in service, and Repair expenses (including expenses for the removal of debris) paid or incurred on or after the applicable disaster date, and before January 1, 2011, for any damage from the severe storms, tornadoes, or flooding to property located in a Midwestern disaster area. 1040 ez free Qualified disaster recovery assistance casualty loss. 1040 ez free   A qualified disaster recovery assistance casualty loss is any deductible section 1231 loss of property located in a Midwestern disaster area if the loss was caused by the severe storms, tornadoes, or flooding. 1040 ez free For this purpose, the amount of the loss is reduced by any recognized gain from an involuntary conversion caused by the severe storms, tornadoes, or flooding of property located in a Midwestern disaster area. 1040 ez free Any such loss taken into account in figuring your qualified disaster recovery assistance loss is not eligible for the election to be treated as having occurred in the previous tax year. 1040 ez free More information. 1040 ez free   For more information on NOLs, see Publication 536 or Publication 542, Corporations. 1040 ez free IRAs and Other Retirement Plans New rules provide for tax-favored withdrawals, repayments, and loans from certain retirement plans for taxpayers who suffered economic losses as a result of the severe storms, tornadoes, or flooding. 1040 ez free Definitions Qualified disaster recovery assistance distribution. 1040 ez free   A qualified disaster recovery assistance distribution is any distribution you received from an eligible retirement plan if all of the following apply. 1040 ez free The distribution was made on or after the applicable disaster date and before January 1, 2010. 1040 ez free Your main home was located in a Midwestern disaster area on the applicable disaster date. 1040 ez free You sustained an economic loss because of the severe storms, tornadoes, or flooding and your main home was in a Midwestern disaster area on the applicable disaster date. 1040 ez free Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. 1040 ez free   If (1) through (3) above apply, you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a qualified disaster recovery assistance distribution, regardless of whether the distribution was made on account of the severe storms, tornadoes, or flooding. 1040 ez free Qualified disaster recovery assistance distributions are permitted without regard to your need or the actual amount of your economic loss. 1040 ez free   The total of your qualified disaster recovery assistance distributions from all plans is limited to $100,000. 1040 ez free If you have distributions in excess of $100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you can allocate the $100,000 limit among the plans any way you choose. 1040 ez free   A reduction or offset (on or after the applicable disaster date) of your account balance in an eligible retirement plan in order to repay a loan can also be designated as a qualified disaster recovery assistance distribution. 1040 ez free Eligible retirement plan. 1040 ez free   An eligible retirement plan can be any of the following. 1040 ez free A qualified pension, profit-sharing, or stock bonus plan (including a 401(k) plan). 1040 ez free A qualified annuity plan. 1040 ez free A tax-sheltered annuity contract. 1040 ez free A governmental section 457 deferred compensation plan. 1040 ez free A traditional, SEP, SIMPLE, or Roth IRA. 1040 ez free Main home. 1040 ez free   Generally, your main home is the home where you live most of the time. 1040 ez free A temporary absence due to special circumstances, such as illness, education, business, military service, evacuation, or vacation, will not change your main home. 1040 ez free Taxation of Qualified Disaster Recovery Assistance Distributions This benefit applies to the counties in both Tables 1 and 2. 1040 ez free Qualified disaster recovery assistance distributions are included in income in equal amounts over three years. 1040 ez free However, if you elect, you can include the entire distribution in your income in the year it was received. 1040 ez free Qualified disaster recovery assistance distributions are not subject to the additional 10% tax (or the additional 25% tax for certain distributions from SIMPLE IRAs) on early distributions from qualified retirement plans (including IRAs). 1040 ez free However, any distributions you receive in excess of the $100,000 qualified disaster recovery assistance distribution limit may be subject to the additional tax on early distributions. 1040 ez free For more information, see Form 8930. 1040 ez free Repayment of Qualified Disaster Recovery Assistance Distributions This benefit applies to the counties in both Tables 1 and 2. 1040 ez free If you choose, you generally can repay any portion of a qualified disaster recovery assistance distribution that is eligible for tax-free rollover treatment to an eligible retirement plan. 1040 ez free Also, you can repay a qualified disaster recovery assistance distribution made on account of a hardship from a retirement plan. 1040 ez free However, see Exceptions later for qualified disaster recovery assistance distributions you cannot repay. 1040 ez free You have three years from the day after the date you received the distribution to make a repayment. 1040 ez free Amounts that are repaid are treated as a qualified rollover and are not included in income. 1040 ez free Also, a repayment of a qualified disaster recovery assistance distribution to an IRA is not counted when figuring the one-rollover-per-year limitation. 1040 ez free See Form 8930 for more information on how to report repayments. 1040 ez free Exceptions. 1040 ez free   You cannot repay the following types of distributions. 1040 ez free Qualified disaster recovery assistance distributions received as a beneficiary (other than a surviving spouse). 1040 ez free Required minimum distributions. 1040 ez free Periodic payments (other than from an IRA) that are for: A period of 10 years or more, Your life or life expectancy, or The joint lives or joint life expectancies of you and your beneficiary. 1040 ez free Repayment of Qualified Distributions for the Purchase or Construction of a Main Home This benefit applies to the counties in both Tables 1 and 2. 1040 ez free If you received a qualified distribution to purchase or construct a main home in a Midwestern disaster area, you can repay part or all of that distribution on or after the applicable disaster date, but no later than March 3, 2009, to an eligible retirement plan. 1040 ez free For this purpose, an eligible retirement plan is any plan, annuity, or IRA to which a qualified rollover can be made. 1040 ez free To be a qualified distribution, the distribution must meet all of the following requirements. 1040 ez free The distribution is a hardship distribution from a 401(k) plan, a hardship distribution from a tax-sheltered annuity contract, or a qualified first-time homebuyer distribution from an IRA. 1040 ez free The distribution was received after the date that was 6 months before the day after the applicable disaster date. 1040 ez free The distribution was to be used to purchase or construct a main home in a Midwestern disaster area that was not purchased or constructed because of the severe storms, tornadoes, or flooding. 1040 ez free Amounts that are repaid before March 4, 2009, are treated as a qualified rollover and are not included in income. 1040 ez free Also, a repayment of a qualified distribution to an IRA is not counted when figuring the one-rollover-per-year limitation. 1040 ez free A qualified distribution not repaid before March 4, 2009, may be taxable for 2007 or 2008 and subject to the additional 10% tax (or the additional 25% tax for certain SIMPLE IRAs) on early distributions. 1040 ez free You must file Form 8930 if you received a qualified distribution that you repaid, in whole or in part, before March 4, 2009. 1040 ez free Loans From Qualified Plans This benefit applies to the counties in both Tables 1 and 2. 1040 ez free The following benefits are available to qualified individuals. 1040 ez free Increases to the limits for distributions treated as loans from employer plans. 1040 ez free A 1-year suspension for payments due on plan loans. 1040 ez free Qualified individual. 1040 ez free   You are a qualified individual if your main home was located in a Midwestern disaster area on the applicable disaster date and you had an economic loss because of the severe storms, tornadoes, or flooding. 1040 ez free Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. 1040 ez free Limits on plan loans. 1040 ez free   The $50,000 limit for distributions treated as plan loans is increased to $100,000. 1040 ez free In addition, the limit based on 50% of your vested accrued benefit is increased to 100% of that benefit. 1040 ez free If your main home was located in a Midwestern disaster area, the higher limits apply only to loans received during the period beginning on October 3, 2008, and ending on December 31, 2009. 1040 ez free One-year suspension of loan payments. 1040 ez free   Payments on plan loans outstanding on or after the applicable disaster date, may be suspended for 1 year by the plan administrator. 1040 ez free To qualify for the suspension, the due date for any loan payment must occur during the period beginning on the applicable disaster date and ending on December 31, 2009. 1040 ez free Additional Tax Relief for Individuals Earned Income Credit and Child Tax Credit This benefit applies to the counties in both Tables 1 and 2. 1040 ez free You can elect to use your 2007 earned income to figure your earned income credit (EIC) and additional child tax credit for 2008 if: Your 2008 earned income is less than your 2007 earned income, and At least one of the following statements is true. 1040 ez free Your main home on the applicable disaster date was in a Midwestern disaster area as shown in Table 1. 1040 ez free Your main home on the applicable disaster date was in a Midwestern disaster area as shown in Table 2, and you were displaced from that home because of the severe storms, tornadoes, or flooding. 1040 ez free Earned income. 1040 ez free    For the purpose of this election, your earned income for both the EIC and the additional child tax credit is the amount of earned income used to figure your EIC, even if you did not take the EIC and even if that amount is different than your earned income for the additional child tax credit. 1040 ez free If you are claiming only the additional child tax credit, you must figure the amount of your earned income for EIC purposes to determine your eligibility to make the election and the amount of the credit. 1040 ez free Joint returns. 1040 ez free   If you file a joint return, you qualify to make this election even if only one spouse meets the requirements. 1040 ez free If you make the election, your 2007 earned income is the sum of your 2007 earned income and your spouse's 2007 earned income. 1040 ez free Making the election. 1040 ez free   If you make the election to use your 2007 earned income, the election applies for figuring both the EIC and the additional child tax credit. 1040 ez free However, you can make the election for the additional child tax credit even if you do not take the EIC. 1040 ez free   Electing to use your 2007 earned income can increase or decrease your EIC. 1040 ez free Take the following steps to decide whether to make the election. 1040 ez free Figure your 2008 EIC using your 2007 earned income. 1040 ez free Figure your 2008 additional child tax credit using your 2007 earned income for EIC purposes. 1040 ez free Add the results of (1) and (2). 1040 ez free Figure your 2008 EIC using your 2008 earned income. 1040 ez free Figure your 2008 additional child tax credit using your 2008 earned income for additional child tax credit purposes. 1040 ez free Add the results of (4) and (5). 1040 ez free Compare the results of (3) and (6). 1040 ez free If (3) is larger than (6), it is to your benefit to make the election. 1040 ez free If (3) is equal to or smaller than (6), making the election will not help you. 1040 ez free   If you elect to use your 2007 earned income and you are claiming the EIC, enter “PYEI” and the amount of your 2007 earned income on the dotted line next to line 64a of Form 1040, on the line next to line 40a of Form 1040A, or in the space to the left of line 8a of Form 1040EZ. 1040 ez free   If you elect to use your 2007 earned income and you are claiming the additional child tax credit, enter your 2007 earned income for EIC purposes (even if you did not claim the EIC) on Form 8812, Additional Child Tax Credit, line 4a, and check the box on that line. 1040 ez free Getting your 2007 tax return information. 1040 ez free   If you do not have your 2007 tax records, you can get the amount of earned income used to figure your 2007 EIC by calling 1-866-562-5227. 1040 ez free You can also get this information by visiting the IRS website at www. 1040 ez free irs. 1040 ez free gov. 1040 ez free   If you prefer to figure your 2007 earned income yourself, copies or transcripts of your filed and processed tax returns can help you reconstruct your tax records. 1040 ez free See Request for Copy or Transcript of Tax Return on page 11. 1040 ez free Additional Exemption for Housing Individuals Displaced by the Severe Storms, Tornadoes, or Flooding This benefit applies to the counties in both Tables 1 and 2. 1040 ez free You can claim an additional exemption amount of $500 for providing housing in your main home for each individual displaced by the severe storms, tornadoes, or flooding. 1040 ez free The additional exemption amount is claimed on Form 8914. 1040 ez free You can claim an additional exemption amount only one time for a specific individual. 1040 ez free If you claimed an additional exemption amount for an individual in 2008, you cannot claim that amount again for the same individual in 2009. 1040 ez free The maximum additional exemption amount you can claim for all displaced individuals is $2,000. 1040 ez free Any additional exemption amount you claimed for displaced individuals in 2008 will reduce the $2,000 maximum for 2009. 1040 ez free The $2,000 limit applies to a husband and wife, whether the husband and wife file joint returns or separate returns. 1040 ez free If married filing separately, the $2,000 can be divided in $500 increments between the spouses. 1040 ez free For example, if one spouse claims an additional exemption amount for one displaced individual, the other spouse, if otherwise eligible, can claim additional exemption amounts for three different displaced individuals. 1040 ez free If two or more taxpayers share the same main home, only one taxpayer in that main home can claim the additional exemption amount for a specific displaced individual. 1040 ez free In order for you to be considered to have provided housing, you must have a legal interest in the main home (that is, own or rent the home). 1040 ez free To qualify as a displaced individual, the individual: Must have had his or her main home in a Midwestern disaster area on the applicable disaster date, and he or she must have been displaced from that home. 1040 ez free If the individual's main home was located in a Midwestern disaster area as shown in Table 2, that home must have been damaged by the severe storms, tornadoes, or flooding or the individual must have been evacuated from that home because of the severe storms, tornadoes, or flooding, Must have been provided housing in your main home for a period of at least 60 consecutive days ending in the tax year in which the exemption is claimed, and Cannot be your spouse or dependent. 1040 ez free You cannot claim the additional exemption amount if you received rent (or any other amount) from any source for providing the housing. 1040 ez free You are permitted to receive payments or reimbursements that do not relate to normal housing costs, including the following. 1040 ez free Food, clothing, or personal items consumed or used by the displaced individual. 1040 ez free Reimbursement for the cost of any long distance telephone calls made by the displaced individual. 1040 ez free Reimbursement for the cost of gasoline for the displaced individual's use of your vehicle. 1040 ez free However, you cannot claim the additional exemption amount if you received any reimbursement for the extra costs of heat, electricity, or water used by the displaced individual. 1040 ez free Also, you must report on Form 8914 the displaced individual's social security number or individual taxpayer identification number to claim an additional exemption amount. 1040 ez free For more information, see Form 8914. 1040 ez free Education Credits This benefit applies only to the counties in Table 1. 1040 ez free The education credits have been expanded for students attending an eligible educational institution located in a Midwestern disaster area (Midwestern disaster area students) for any tax year beginning in 2008 or 2009. 1040 ez free The Hope credit for a Midwestern disaster area student is increased to 100% of the first $2,400 in qualified education expenses and 50% of the next $2,400 of qualified education expenses for a maximum credit of $3,600 per student. 1040 ez free The lifetime learning credit rate for a Midwestern disaster area student is increased from 20% to 40%. 1040 ez free The definition of qualified education expenses for a Midwestern disaster area student also has been expanded. 1040 ez free This expanded definition also applies to the tuition and fees deduction claimed on Form 8917. 1040 ez free In addition to tuition and fees required for the student's enrollment or attendance at an eligible educational institution, qualified education expenses for a Midwestern disaster area student include the following. 1040 ez free Books, supplies, and equipment required for enrollment or attendance at an eligible educational institution. 1040 ez free For a special needs student, expenses that are necessary for that person's enrollment or attendance at an eligible educational institution. 1040 ez free For a student who is at least a half-time student, the reasonable costs of room and board, but only to the extent that the costs are not more than the greater of the following two amounts. 1040 ez free The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student. 1040 ez free The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. 1040 ez free You will need to contact the eligible educational institution for qualified room and board costs. 1040 ez free For more information, see Form 8863. 1040 ez free See Form 8917 for the tuition and fees deduction. 1040 ez free Recapture of Federal Mortgage Subsidy This benefit applies only to the counties in Table 1. 1040 ez free Generally, if you financed your home under a federally subsidized program (loans from tax-exempt qualified mortgage bonds or loans with mortgage credit certificates), you may have to recapture all or part of the benefit you received from that program when you sell or otherwise dispose of your home. 1040 ez free However, you do not have to recapture any benefit if your mortgage loan was a qualified home improvement loan of not more than $15,000. 1040 ez free This amount is increased to $150,000 if the loan was provided before 2011 and was used to alter, repair, or improve an existing owner-occupied residence in a Midwestern disaster area as shown in Table 1. 1040 ez free Exclusion of Certain Cancellations of Indebtedness by Reason of the Severe Storms, Tornadoes, or Flooding This benefit applies to the counties in both Tables 1 and 2. 1040 ez free Generally, discharges of nonbusiness debts (such as mortgages) made on or after the applicable disaster date and before January 1, 2010, are excluded from income for individuals whose main home was in a Midwestern disaster area on the applicable disaster date. 1040 ez free If the individual's main home was located in a Midwestern disaster area as shown in Table 2, the individual also must have had an economic loss because of the severe storms, tornadoes, or flooding. 1040 ez free Examples of an economic loss include, but are not limited to: Loss, damage to, or destruction of real or personal property from fire, flooding, looting, vandalism, theft, wind, or other cause; Loss related to displacement from your home; or Loss of livelihood due to temporary or permanent layoffs. 1040 ez free This relief does not apply to any debt secured by real property located outside a Midwestern disaster area. 1040 ez free You may also have to reduce certain tax attributes by the amount excluded. 1040 ez free For more information, see Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). 1040 ez free Tax Relief for Temporary Relocation This benefit applies only to the counties in Table 1. 1040 ez free The IRS can adjust the internal revenue laws to ensure that taxpayers do not lose a deduction or credit or experience a change of filing status in 2008 or 2009 as a result of a temporary relocation caused by the severe storms, tornadoes, or flooding. 1040 ez free However, any such adjustment must ensure that an individual is not taken into account by more than one taxpayer for the same tax benefit. 1040 ez free The IRS has exercised this authority as follows. 1040 ez free In determining whether you furnished over one-half of the cost of maintaining a household, you can exclude from total household costs any assistance received from the government or charitable organizations because you were temporarily relocated as a result of the severe storms, tornadoes, or flooding. 1040 ez free In determining whether you provided more than one-half of an individual's support, you can disregard any assistance received from the government or charitable organizations because you were temporarily relocated as a result of the severe storms, tornadoes, or flooding. 1040 ez free You can treat as a student an individual who enrolled in school before the applicable disaster date, and who is unable to attend classes because of the severe storms, tornadoes, or flooding, for each month of the enrollment period that individual is prevented by the severe storms, tornadoes, or flooding from attending school as planned. 1040 ez free Additional Tax Relief for Businesses Employee Retention Credit This benefit applies only to the counties in Table 1. 1040 ez free An eligible employer who conducted an active trade or business in a Midwestern disaster area can claim the employee retention credit. 1040 ez free The credit is 40% of qualified wages for each eligible employee (up to a maximum of $6,000 in qualified wages per employee). 1040 ez free Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). 1040 ez free Use Form 5884-A to claim the credit. 1040 ez free Employers affected by the severe storms, tornadoes, or flooding. 1040 ez free   The following definitions apply to employers affected by the severe storms, tornadoes, or flooding. 1040 ez free Eligible employer. 1040 ez free   For this purpose, an eligible employer is any employer who meets all of the following. 1040 ez free Employed an average of not more than 200 employees on business days during the tax year before the applicable disaster date. 1040 ez free Conducted an active trade or business on the applicable disaster date in a Midwestern disaster area. 1040 ez free Whose trade or business was inoperable on any day after the applicable disaster date and before January 1, 2009, because of the damage caused by the severe storms, tornadoes, or flooding. 1040 ez free Eligible employee. 1040 ez free   For this purpose, an eligible employee is an employee whose principal place of employment on the applicable disaster date with such eligible employer was in a Midwestern disaster area. 1040 ez free An employee is not an eligible employee for purposes of the severe storms, tornadoes, or flooding if the employee is treated as an eligible employee for the work opportunity credit. 1040 ez free Qualified wages. 1040 ez free   Qualified wages are wages (up to $6,000 per employee) you paid or incurred before January 1, 2009, for an eligible employee beginning on the date your trade or business first became inoperable at the employee's principal place of employment immediately before the applicable disaster, and ending on the date your trade or business resumed significant operations at that place. 1040 ez free In addition, the wages must have been paid or incurred after the applicable disaster date. 1040 ez free    This includes wages paid even if the employee performed no services, performed services at a place of employment other than the principal place of employment, or performed services at the principal place of employment before significant operations resumed. 1040 ez free    Wages qualifying for the credit generally have the same meaning as wages subject to the Federal Unemployment Tax Act (FUTA). 1040 ez free Qualified wages also include amounts you paid for medical or hospitalization expenses in connection with sickness or accident disability. 1040 ez free Qualified wages for any employee must be reduced by the amount of any work supplementation payment you received under the Social Security Act. 1040 ez free   For agricultural employees, if the work performed by any employee during more than half of any pay period qualified under FUTA as agricultural labor, that employee's wages subject to social security and Medicare taxes are qualified wages. 1040 ez free For a special rule that applies to railroad employees, see section 51(h)(1)(B). 1040 ez free   Qualified wages do not include the following. 1040 ez free Wages paid to your dependent or a related individual. 1040 ez free See section 51(i)(1). 1040 ez free Wages paid to any employee during the period for which you received payment for the employee from a federally funded on-the-job training program. 1040 ez free Wages for services of replacement workers during a strike or lockout. 1040 ez free   For more information, see Form 5884-A. 1040 ez free Employer Housing Credit and Exclusion This benefit applies only to the counties in Table 1. 1040 ez free An employer who conducted an active trade or business in a Midwestern disaster area can claim the employer housing credit. 1040 ez free The credit is equal to 30% of the value (up to $600 per month per employee) of in-kind lodging furnished to a qualified employee (and the employee's spouse or dependents) from November 1, 2008, through May 1, 2009. 1040 ez free The value of the lodging is excluded from the income of the qualified employee but is treated as wages for purposes of taxes imposed under the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA). 1040 ez free Generally, you must reduce your deduction for salaries and wages by the amount of this credit (before the tax liability limit). 1040 ez free The employer must use Form 5884-A to claim the credit. 1040 ez free A qualified employee is an individual who had a main home in a Midwestern disaster area on the applicable disaster date, and who performs substantially all employment services in a Midwestern disaster area for the employer furnishing the lodging. 1040 ez free The employee cannot be your dependent or a related individual. 1040 ez free See section 51(i)(1). 1040 ez free For more information, see Form 5884-A. 1040 ez free Demolition and Clean-up Costs This benefit applies only to the counties in Table 1. 1040 ez free You can elect to deduct 50% of any qualified disaster recovery assistance clean-up costs for the tax year in which the costs are paid or incurred, instead of capitalizing them. 1040 ez free Qualified disaster recovery assistance clean-up costs are any amounts paid or incurred on or after the applicable disaster date, and before January 1, 2011, for the removal of debris from, or the demolition of structures on, real property located in a Midwestern disaster area that is: Held by you for use in a trade or business or for the production of income, or Inventory or other property held primarily for sale to customers in the ordinary course of your trade or business. 1040 ez free Qualified disaster recovery assistance clean-up costs are limited to amounts necessary due to damage attributable to the severe storms, tornadoes, or flooding in the Midwestern disaster areas. 1040 ez free Increase in Rehabilitation Tax Credit This benefit applies only to the counties in Table 1. 1040 ez free The rehabilitation credit is increased for qualified rehabilitation expenditures paid or incurred on or after the applicable disaster date, and before January 1, 2012, on buildings located in a Midwestern disaster area as follows. 1040 ez free For pre-1936 buildings (other than certified historic structures), the credit percentage is increased from 10% to 13%. 1040 ez free For certified historic structures, the credit percentage is increased from 20% to 26%. 1040 ez free For more information, see Form 3468, Investment Credit. 1040 ez free Request for Copy or Transcript of Tax Return Request for copy of tax return. 1040 ez free   You can use Form 4506 to order a copy of your tax return. 1040 ez free Generally, there is a $57 fee for requesting each copy of a tax return. 1040 ez free If your main home, principal place of business, or tax records are located in a Midwestern disaster area, the fee will be waived if “Midwestern Disaster Area” is written in red across the top of the form when filed. 1040 ez free Request for transcript of tax return. 1040 ez free   You can use Form 4506-T to order a free transcript of your tax return. 1040 ez free A transcript provides most of the line entries from a tax return and usually contains the information that a third party requires. 1040 ez free You can also call 1-800-829-1040 to order a transcript. 1040 ez free How To Get Tax Help Special IRS assistance. 1040 ez free   The IRS is providing special help for those affected by the severe storms, tornadoes, or flooding, as well as survivors and personal representatives of the victims. 1040 ez free We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by recent federally declared disasters, or who have other tax issues related to the severe storms, tornadoes, or flooding. 1040 ez free Call 1-866-562-5227 Monday through FridayIn English–7 a. 1040 ez free m. 1040 ez free to 10 p. 1040 ez free m. 1040 ez free local timeIn Spanish–8 a. 1040 ez free m. 1040 ez free to 9:30 p. 1040 ez free m. 1040 ez free local time   The IRS website at www. 1040 ez free irs. 1040 ez free gov has notices and other tax relief information. 1040 ez free Check it periodically for any new guidance. 1040 ez free You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. 1040 ez free By selecting the method that is best for you, you will have quick and easy access to tax help. 1040 ez free Contacting your Taxpayer Advocate. 1040 ez free   The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. 1040 ez free Here are seven things every taxpayer should know about TAS: TAS is your voice at the IRS. 1040 ez free Our service is free, confidential, and tailored to meet your needs. 1040 ez free You may be eligible for TAS help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should. 1040 ez free TAS helps taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. 1040 ez free This includes businesses as well as individuals. 1040 ez free TAS employees know the IRS and how to navigate it. 1040 ez free We will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved. 1040 ez free TAS has at least one local taxpayer advocate in every state, the District of Columbia, and Puerto Rico. 1040 ez free You can call your local advocate, whose number is in your phone book, in Pub. 1040 ez free 1546, Taxpayer Advocate Service—Your Voice at the IRS, and on our website at www. 1040 ez free irs. 1040 ez free gov/advocate. 1040 ez free You can also call our toll-free line at 1-877-777-4778 or TTY/TDD 1-800-829-4059. 1040 ez free You can learn about your rights and responsibilities as a taxpayer by visiting our online tax toolkit at www. 1040 ez free taxtoolkit. 1040 ez free irs. 1040 ez free gov. 1040 ez free Low Income Taxpayer Clinics (LITCs). 1040 ez free   The Low Income Taxpayer Clinic program serves individuals who have a problem with the IRS and whose income is below a certain level. 1040 ez free LITCs are independent from the IRS. 1040 ez free Most LITCs can provide representation before the IRS or in court on audits, tax collection disputes, and other issues for free or a small fee. 1040 ez free If an individual's native language is not English, some clinics can provide multilingual information about taxpayer rights and responsibilities. 1040 ez free For more information, see Publication 4134, Low Income Taxpayer Clinic List. 1040 ez free This publication is available at www. 1040 ez free irs. 1040 ez free gov, by calling 1-800-TAX-FORM (1-800-829-3676), or at your local IRS office. 1040 ez free Free tax services. 1040 ez free   To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. 1040 ez free It contains lists of free tax information sources, including publications, services, and free tax education and assistance programs. 1040 ez free It also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on your telephone. 1040 ez free   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. 1040 ez free Free help with your return. 1040 ez free   Free help in preparing your return is available nationwide from IRS-trained volunteers. 1040 ez free The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. 1040 ez free Many VITA sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 1040 ez free To find the nearest VITA or TCE site, call 1-800-829-1040. 1040 ez free   As part of the TCE program, AARP offers the Tax-Aide counseling program. 1040 ez free To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website atwww. 1040 ez free aarp. 1040 ez free org/money/taxaide. 1040 ez free   For more information on these programs, go to www. 1040 ez free irs. 1040 ez free gov and enter keyword “VITA” in the upper right-hand corner. 1040 ez free Internet. 1040 ez free You can access the IRS website at www. 1040 ez free irs. 1040 ez free gov 24 hours a day, 7 days a week to: E-file your return. 1040 ez free Find out about commercial tax preparation and e-file services available free to eligible taxpayers. 1040 ez free Check the status of your 2009 refund. 1040 ez free Go to www. 1040 ez free irs. 1040 ez free gov and click on Where's My Refund. 1040 ez free Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. 1040 ez free If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). 1040 ez free Have your 2009 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. 1040 ez free Download forms, instructions, and publications. 1040 ez free Order IRS products online. 1040 ez free Research your tax questions online. 1040 ez free Search publications online by topic or keyword. 1040 ez free Use the online Internal Revenue Code, Regulations, or other official guidance. 1040 ez free View Internal Revenue Bulletins (IRBs) published in the last few years. 1040 ez free Figure your withholding allowances using the withholding calculator online at www. 1040 ez free irs. 1040 ez free gov/individuals. 1040 ez free Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant. 1040 ez free Sign up to receive local and national tax news by email. 1040 ez free Get information on starting and operating a small business. 1040 ez free Phone. 1040 ez free Many services are available by phone. 1040 ez free Ordering forms, instructions, and publications. 1040 ez free Call 1-800-TAX FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. 1040 ez free You should receive your order within 10 days. 1040 ez free Asking tax questions. 1040 ez free Call the IRS with your tax questions at 1-800-829-1040. 1040 ez free Solving problems. 1040 ez free You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. 1040 ez free An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. 1040 ez free Call your local Taxpayer Assistance Center for an appointment. 1040 ez free To find the number, go to www. 1040 ez free irs. 1040 ez free gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. 1040 ez free TTY/TDD equipment. 1040 ez free If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. 1040 ez free TeleTax topics. 1040 ez free Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. 1040 ez free Refund information. 1040 ez free To check the status of your 2009 refund, call 1-800-829-1954 during business hours or 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). 1040 ez free Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. 1040 ez free If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). 1040 ez free Have your 2009 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. 1040 ez free Refunds are sent out weekly on Fridays. 1040 ez free If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. 1040 ez free Other refund information. 1040 ez free To check the status of a prior year refund or amended return refund, call 1-800-829-1954. 1040 ez free Evaluating the quality of our telephone services. 1040 ez free To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. 1040 ez free One method is for a second IRS representative to listen in on or record random telephone calls. 1040 ez free Another is to ask some callers to complete a short survey at the end of the call. 1040 ez free Walk-in. 1040 ez free Many products and services are available on a walk-in basis. 1040 ez free Products. 1040 ez free You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 1040 ez free Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. 1040 ez free Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. 1040 ez free Services. 1040 ez free You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. 1040 ez free An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. 1040 ez free If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. 1040 ez free No appointment is necessary—just walk in. 1040 ez free If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. 1040 ez free A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. 1040 ez free If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. 1040 ez free All other issues will be handled without an appointment. 1040 ez free To find the number of your local office, go to www. 1040 ez free irs. 1040 ez free gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. 1040 ez free Mail. 1040 ez free You can send your order for forms, instructions, and publications to the address below. 1040 ez free You should receive a response within 10 days after your request is received. 1040 ez free Internal Revenue Service1201 N. 1040 ez free Mitsubishi MotorwayBloomington, IL 61705-6613 DVD for tax products. 1040 ez free You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. 1040 ez free Prior-year forms, instructions, and publications. 1040 ez free Tax Map: an electronic research tool and finding aid. 1040 ez free Tax law frequently asked questions. 1040 ez free Tax Topics from the IRS telephone response system. 1040 ez free Internal Revenue Code—Title 26 of the U. 1040 ez free S. 1040 ez free Code. 1040 ez free Fill-in, print, and save features for most tax forms. 1040 ez free Internal Revenue Bulletins. 1040 ez free Toll-free and email technical support. 1040 ez free Two releases during the year. 1040 ez free – The first release will ship the beginning of January 2010. 1040 ez free – The final release will ship the beginning of March 2010. 1040 ez free Purchase the DVD from National Technical Information Service (NTIS) at www. 1040 ez free irs. 1040 ez free gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). 1040 ez free Prev  Up  Next   Home   More Online Publications
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Marine Mammal Commission

The Marine Mammal Commission is an independent federal agency that provides oversight of all marine mammal conservation policies and programs carried out by federal regulatory agencies.

Contact the Agency or Department

Website: Marine Mammal Commission

E-mail:

Address: 4340 East-West Highway
Suite 700

Bethesda, MD 20814

Phone Number: (301) 504-0087

The 1040 Ez Free

1040 ez free Publication 721 - Main Content Table of Contents Part I General InformationRefund of Contributions Tax Withholding and Estimated Tax Filing Requirements Part II Rules for RetireesAnnuity starting date. 1040 ez free Gross monthly rate. 1040 ez free Your cost. 1040 ez free Choosing a survivor annuity after retirement. 1040 ez free Canceling a survivor annuity after retirement. 1040 ez free Annuity starting date after 1986. 1040 ez free Annuity starting date before 1987. 1040 ez free Simplified Method General Rule Three-Year Rule Alternative Annuity Option Federal Gift Tax Retirement During the Past Year Reemployment After Retirement Nonresident Aliens Thrift Savings Plan Rollover Rules Distributions Used To Pay Insurance Premiums for Public Safety Officers How To Report Benefits Part III Rules for Disability Retirement and Credit for the Elderly or the DisabledDisability Annuity Other Benefits Credit for the Elderly or the Disabled Part IV Rules for Survivors of Federal EmployeesFERS Death Benefit CSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Thrift Savings Plan Federal Estate Tax Part V Rules for Survivors of Federal RetireesCSRS or FERS Survivor Annuity Lump-Sum CSRS or FERS Payment Voluntary Contributions Thrift Savings Plan Federal Estate Tax Income Tax Deduction for Estate Tax Paid How To Get Tax HelpLow Income Taxpayer Clinics Part I General Information This part of the publication contains information that can apply to most recipients of civil service retirement benefits. 1040 ez free Refund of Contributions If you leave federal government service or transfer to a job not under the CSRS or FERS and you are not eligible for an immediate annuity, you can choose to receive a refund of the money in your CSRS or FERS retirement account. 1040 ez free The refund will include both regular and voluntary contributions you made to the fund, plus any interest payable. 1040 ez free If the refund includes only your contributions, none of the refund is taxable. 1040 ez free If it includes any interest, the interest is taxable unless you roll it over directly into another qualified plan or a traditional individual retirement arrangement (IRA). 1040 ez free If you do not have the Office of Personnel Management (OPM) transfer the interest to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. 1040 ez free See Rollover Rules in Part II for information on how to make a rollover. 1040 ez free Interest is not paid on contributions to the CSRS for service after 1956 unless your service was for more than 1 year but not more than 5 years. 1040 ez free Therefore, many employees who withdraw their contributions under the CSRS do not get interest and do not owe any tax on their refund. 1040 ez free If you do not roll over interest included in your refund, it may qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. 1040 ez free If you separate from service before the calendar year in which you reach age 55, it may be subject to an additional 10% tax on early distributions. 1040 ez free For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. 1040 ez free A lump-sum distribution is eligible for capital gain treatment or the 10-year tax option only if the plan participant was born before January 2, 1936. 1040 ez free Tax Withholding and Estimated Tax The CSRS or FERS annuity you receive is subject to federal income tax withholding, unless you choose not to have tax withheld. 1040 ez free OPM will tell you how to make the choice. 1040 ez free The choice for no withholding remains in effect until you change it. 1040 ez free These withholding rules also apply to a disability annuity, whether received before or after minimum retirement age. 1040 ez free If you choose not to have tax withheld, or if you do not have enough tax withheld, you may have to make estimated tax payments. 1040 ez free You may owe a penalty if the total of your withheld tax and estimated tax does not cover most of the tax shown on your return. 1040 ez free Generally, you will owe the penalty for 2014 if the additional tax you must pay with your return is $1,000 or more and more than 10% of the tax to be shown on your 2014 return. 1040 ez free For more information, including exceptions to the penalty, see chapter 4 of Publication 505, Tax Withholding and Estimated Tax. 1040 ez free Form CSA 1099R. 1040 ez free   Form CSA 1099R is mailed to you by OPM each year. 1040 ez free It will show any tax you had withheld. 1040 ez free File a copy of Form CSA 1099R with your tax return if any federal income tax was withheld. 1040 ez free    You also can view and download your Form CSA 1099R by visiting the OPM website at  www. 1040 ez free servicesonline. 1040 ez free opm. 1040 ez free gov. 1040 ez free To log in, you will need your retirement CSA claim number and your personal identification number. 1040 ez free Choosing no withholding on payments outside the United States. 1040 ez free   The choice for no withholding generally cannot be made for annuity payments to be delivered outside the United States and its possessions. 1040 ez free   To choose no withholding if you are a U. 1040 ez free S. 1040 ez free citizen or resident alien, you must provide OPM with your home address in the United States or its possessions. 1040 ez free Otherwise, OPM has to withhold tax. 1040 ez free For example, OPM must withhold if you provide a U. 1040 ez free S. 1040 ez free address for a nominee, trustee, or agent (such as a bank) to whom the benefits are to be delivered, but you do not provide your own U. 1040 ez free S. 1040 ez free home address. 1040 ez free   If you do not provide a home address in the United States or its possessions, you can choose not to have tax withheld only if you certify to OPM that you are not a U. 1040 ez free S. 1040 ez free citizen, a U. 1040 ez free S. 1040 ez free resident alien, or someone who left the United States to avoid tax. 1040 ez free But if you so certify, you may be subject to the 30% flat rate withholding that applies to nonresident aliens. 1040 ez free For details, see Publication 519, U. 1040 ez free S. 1040 ez free Tax Guide for Aliens. 1040 ez free Withholding certificate. 1040 ez free   If you give OPM a Form W-4P-A, Election of Federal Income Tax Withholding, you can choose not to have tax withheld or you can choose to have tax withheld. 1040 ez free The amount of tax withheld depends on your marital status, the number of withholding allowances, and any additional amount you designate to be withheld. 1040 ez free If you do not make either of these choices, OPM must withhold as if you were married with three withholding allowances. 1040 ez free To change the amount of tax withholding or to stop withholding, call OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. 1040 ez free C. 1040 ez free calling area must call 202-606-0500). 1040 ez free No special form is needed. 1040 ez free You will need your retirement CSA or CSF claim number, your social security number, and your personal identification number (PIN) when you call. 1040 ez free If you have TTY/TDD equipment, call 1-855–887–4957. 1040 ez free If you need a PIN, call OPM's Retirement Information Office. 1040 ez free You also can change the amount of withholding or stop withholding online by visiting the OPM website at www. 1040 ez free servicesonline. 1040 ez free opm. 1040 ez free gov. 1040 ez free You will need your retirement CSA or CSF claim number and your PIN. 1040 ez free Withholding from certain lump-sum payments. 1040 ez free   If you leave the federal government before becoming eligible to retire and you apply for a refund of your CSRS or FERS contributions, or you die without leaving a survivor eligible for an annuity, you or your beneficiary will receive a distribution of your contributions to the retirement plan plus any interest payable. 1040 ez free Tax will be withheld at a 20% rate on the interest distributed. 1040 ez free However, tax will not be withheld if you have OPM transfer (roll over) the interest directly to your traditional IRA or other qualified plan. 1040 ez free If you have OPM transfer (roll over) the interest directly to a Roth IRA, the entire amount will be taxed in the current year. 1040 ez free Because no income tax will be withheld at the time of the transfer, you may want to increase your withholding or pay estimated taxes. 1040 ez free See Rollover Rules in Part II. 1040 ez free If you receive only your contributions, no tax will be withheld. 1040 ez free Withholding from Thrift Savings Plan payments. 1040 ez free   Generally, a distribution that you receive from the TSP is subject to federal income tax withholding. 1040 ez free The amount withheld is: 20% if the distribution is an eligible rollover distribution, 10% if it is a nonperiodic distribution other than an eligible rollover distribution, or An amount determined as if you were married with three withholding allowances, unless you submit a withholding certificate (Form W-4P), if it is a periodic distribution. 1040 ez free  However, you usually can choose not to have tax withheld from TSP payments other than eligible rollover distributions. 1040 ez free By January 31 after the end of the year in which you receive a distribution, the TSP will issue Form 1099-R showing the total distributions you received in the prior year and the amount of tax withheld. 1040 ez free   For a detailed discussion of withholding on distributions from the TSP, see Important Tax Information About Payments From Your TSP Account, available from your agency personnel office or from the TSP. 1040 ez free The above document is also available in the “Forms & Publications” section of the TSP website at www. 1040 ez free tsp. 1040 ez free gov. 1040 ez free Estimated tax. 1040 ez free   Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax for 2014 (after subtracting your withholding and credits) and you expect your withholding and your credits to be less than the smaller of: 90% of the tax to be shown on your income tax return for 2014, or 100% of the tax shown on your 2013 income tax return (110% of that amount if the adjusted gross income shown on the return was more than $150,000 ($75,000 if your filing status for 2014 will be married filing separately)). 1040 ez free The return must cover all 12 months. 1040 ez free   You do not have to pay estimated tax for 2014 if you were a U. 1040 ez free S. 1040 ez free citizen or resident alien for all of 2013 and you had no tax liability for the full 12-month 2013 tax year. 1040 ez free   Publication 505 contains information that you can use to help you figure your estimated tax payments. 1040 ez free Filing Requirements If your gross income, including the taxable part of your annuity, is less than a certain amount, you generally do not have to file a federal income tax return for that year. 1040 ez free The gross income filing requirements for the tax year are in the instructions to Form 1040, 1040A, or 1040EZ. 1040 ez free Children. 1040 ez free   If you are the surviving spouse of a federal employee or retiree and your monthly annuity check includes a survivor annuity for one or more children, each child's annuity counts as his or her own income (not yours) for federal income tax purposes. 1040 ez free   If your child can be claimed as a dependent, treat the taxable part of his or her annuity as unearned income when applying the filing requirements for dependents. 1040 ez free Form CSF 1099R. 1040 ez free   Form CSF 1099R will be mailed to you by January 31 after the end of each tax year. 1040 ez free It will show the total amount of the annuity you received in the past year. 1040 ez free It also should show, separately, the survivor annuity for a child or children. 1040 ez free Only the part that is each individual's survivor annuity should be shown on that individual's Form 1040 or 1040A. 1040 ez free   If your Form CSF 1099R does not show separately the amount paid to you for a child or children, attach a statement to your return, along with a copy of Form CSF 1099R, explaining why the amount shown on the tax return differs from the amount shown on Form CSF 1099R. 1040 ez free    You also can view and download your Form CSF 1099R by visiting the OPM website at  www. 1040 ez free servicesonline. 1040 ez free opm. 1040 ez free gov. 1040 ez free To log in you will need your retirement CSF claim number and personal identification number. 1040 ez free    You may request a Summary of Payments, showing the amounts paid to you for your child(ren), from OPM by calling OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. 1040 ez free C. 1040 ez free calling area must call 202-606-0500). 1040 ez free You will need your CSF claim number and your social security number when you call. 1040 ez free Taxable part of annuity. 1040 ez free   To find the taxable part of a retiree's annuity when applying the filing requirements, see the discussion in Part II, Rules for Retirees , or Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled , whichever applies. 1040 ez free To find the taxable part of each survivor annuity when applying the filing requirements, see the discussion in Part IV, Rules for Survivors of Federal Employees , or Part V, Rules for Survivors of Federal Retirees , whichever applies. 1040 ez free Part II Rules for Retirees This part of the publication is for retirees who retired on nondisability retirement. 1040 ez free If you retired on disability before you reached your minimum retirement age, see Part III, Rules for Disability Retirement and Credit for the Elderly or the Disabled. 1040 ez free However, on the day after you reach your minimum retirement age, use the rules in this section to report your disability retirement and begin recovering your cost. 1040 ez free Annuity statement. 1040 ez free   The statement you received from OPM when your CSRS or FERS annuity was approved shows the commencing date (the annuity starting date), the gross monthly rate of your annuity benefit, and your total contributions to the retirement plan (your cost). 1040 ez free You will use this information to figure the tax-free recovery of your cost. 1040 ez free Annuity starting date. 1040 ez free   If you retire from federal government service on a regular annuity, your annuity starting date is the commencing date on your annuity statement from OPM. 1040 ez free If something delays payment of your annuity, such as a late application for retirement, it does not affect the date your annuity begins to accrue or your annuity starting date. 1040 ez free Gross monthly rate. 1040 ez free   This is the amount you were to get after any adjustment for electing a survivor's annuity or for electing the lump-sum payment under the alternative annuity option (if either applied) but before any deduction for income tax withholding, insurance premiums, etc. 1040 ez free Your cost. 1040 ez free   Your monthly annuity payment contains an amount on which you have previously paid income tax. 1040 ez free This amount represents part of your contributions to the retirement plan. 1040 ez free Even though you did not receive the money that was contributed to the plan, it was included in your gross income for federal income tax purposes in the years it was taken out of your pay. 1040 ez free   The cost of your annuity is the total of your contributions to the retirement plan, as shown on your annuity statement from OPM. 1040 ez free If you elected the alternative annuity option, it includes any deemed deposits and any deemed redeposits that were added to your lump-sum credit. 1040 ez free (See Lump-sum credit under Alternative Annuity Option, later. 1040 ez free )   If you repaid contributions that you had withdrawn from the retirement plan earlier, or if you paid into the plan to receive full credit for service not subject to retirement deductions, the entire repayment, including any interest, is a part of your cost. 1040 ez free You cannot claim an interest deduction for any interest payments. 1040 ez free You cannot treat these payments as voluntary contributions; they are considered regular employee contributions. 1040 ez free Recovering your cost tax free. 1040 ez free   How you figure the tax-free recovery of the cost of your CSRS or FERS annuity depends on your annuity starting date. 1040 ez free If your annuity starting date is before July 2, 1986, either the Three-Year Rule or the General Rule (both discussed later) applies to your annuity. 1040 ez free If your annuity starting date is after July 1, 1986, and before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method (discussed later). 1040 ez free If your annuity starting date is after November 18, 1996, you must use the Simplified Method. 1040 ez free   Under both the General Rule and the Simplified Method, each of your monthly annuity payments is made up of two parts: the tax-free part that is a return of your cost, and the taxable part that is the amount of each payment that is more than the part that represents your cost (unless such payment is used for purposes discussed under Distributions Used To Pay Insurance Premiums for Public Safety Officers , later). 1040 ez free The tax-free part is a fixed dollar amount. 1040 ez free It remains the same, even if your annuity is increased. 1040 ez free Generally, this rule applies as long as you receive your annuity. 1040 ez free However, see Exclusion limit , later. 1040 ez free Choosing a survivor annuity after retirement. 1040 ez free    If you retired without a survivor annuity and report your annuity under the Simplified Method, do not change your tax-free monthly amount even if you later choose a survivor annuity. 1040 ez free   If you retired without a survivor annuity and report your annuity under the General Rule, you must figure the tax-free part of your annuity using a new exclusion percentage if you later choose a survivor annuity and take reduced annuity payments. 1040 ez free To figure the new exclusion percentage, reduce your cost by the amount you previously recovered tax free. 1040 ez free Figure the expected return as of the date the reduced annuity begins. 1040 ez free For details on the General Rule, see Publication 939. 1040 ez free Canceling a survivor annuity after retirement. 1040 ez free   If you retired with a survivor annuity payable to your spouse upon your death and you notify OPM that your marriage has ended, your annuity might be increased to remove the reduction for a survivor benefit. 1040 ez free The increased annuity does not change the cost recovery you figured at the annuity starting date. 1040 ez free The tax-free part of each annuity payment remains the same. 1040 ez free    For more information about choosing or canceling a survivor annuity after retirement, contact OPM's Retirement Information Office at 1-888-767-6738 (customers within the local Washington, D. 1040 ez free C. 1040 ez free calling area must call 202-606-0500). 1040 ez free Exclusion limit. 1040 ez free   Your annuity starting date determines the total amount of annuity payments that you can exclude from income over the years. 1040 ez free Annuity starting date after 1986. 1040 ez free   If your annuity starting date is after 1986, the total amount of annuity income that you (or the survivor annuitant) can exclude over the years as a return of your cost cannot exceed your total cost. 1040 ez free Annuity payments you or your survivors receive after the total cost in the plan has been recovered are generally fully taxable. 1040 ez free Example. 1040 ez free Your annuity starting date is after 1986 and you exclude $100 a month under the Simplified Method. 1040 ez free If your cost is $12,000, the exclusion ends after 10 years (120 months). 1040 ez free Thereafter, your entire annuity is generally fully taxable. 1040 ez free Annuity starting date before 1987. 1040 ez free   If your annuity starting date is before 1987, you can continue to take your monthly exclusion figured under the General Rule or Simplified Method for as long as you receive your annuity. 1040 ez free If you chose a joint and survivor annuity, your survivor can continue to take that same exclusion. 1040 ez free The total exclusion may be more than your cost. 1040 ez free Deduction of unrecovered cost. 1040 ez free   If your annuity starting date is after July 1, 1986, and the cost of your annuity has not been fully recovered at your (or the survivor annuitant's) death, a deduction is allowed for the unrecovered cost. 1040 ez free The deduction is claimed on your (or your survivor's) final tax return as a miscellaneous itemized deduction (not subject to the 2%-of-adjusted-gross-income limit). 1040 ez free If your annuity starting date is before July 2, 1986, no tax benefit is allowed for any unrecovered cost at death. 1040 ez free Simplified Method If your annuity starting date is after November 18, 1996, you must use the Simplified Method to figure the tax-free part of your CSRS or FERS annuity. 1040 ez free (OPM has figured the taxable amount of your annuity shown on your Form CSA 1099R using the Simplified Method. 1040 ez free ) You could have chosen to use either the Simplified Method or the General Rule if your annuity starting date is after July 1, 1986, but before November 19, 1996. 1040 ez free The Simplified Method does not apply if your annuity starting date is before July 2, 1986. 1040 ez free Under the Simplified Method, you figure the tax-free part of each full monthly payment by dividing your cost by a number of months based on your age. 1040 ez free This number will differ depending on whether your annuity starting date is before November 19, 1996, or after November 18, 1996. 1040 ez free If your annuity starting date is after 1997 and your annuity includes a survivor benefit for your spouse, this number is based on your combined ages. 1040 ez free Worksheet A. 1040 ez free   Use Worksheet A. 1040 ez free Simplified Method (near the end of this publication), to figure your taxable annuity. 1040 ez free Be sure to keep the completed worksheet. 1040 ez free It will help you figure your taxable amounts for later years. 1040 ez free Instead of Worksheet A, you generally can use the Simplified Method Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR to figure your taxable annuity. 1040 ez free However, you must use Worksheet A and Worksheet B in this publication if you chose the alternative annuity option, discussed later. 1040 ez free Line 2. 1040 ez free   See Your cost , earlier, for an explanation of your cost in the plan. 1040 ez free If your annuity starting date is after November 18, 1996, and you chose the alternative annuity option (explained later), you must reduce your cost by the tax-free part of the lump-sum payment you received. 1040 ez free Line 3. 1040 ez free   The number you enter on line 3 is the appropriate number from Table 1 or 2 representing approximate life expectancies in months. 1040 ez free If your annuity starting date is after 1997, use: Table 1 for an annuity without a survivor benefit, or Table 2 for an annuity with a survivor benefit. 1040 ez free If your annuity starting date is before 1998, use Table 1. 1040 ez free Line 6. 1040 ez free   If you received contributions tax free before 2013, the amount previously recovered tax free that you must enter on line 6 is the total amount from line 10 of last year's worksheet. 1040 ez free If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, this amount includes the tax-free part of the lump-sum payment you received. 1040 ez free Example. 1040 ez free Bill Smith retired from the Federal Government on March 31, 2013, under an annuity that will provide a survivor benefit for his wife, Kathy. 1040 ez free His annuity starting date is April 1, 2013, the annuity is paid in arrears, and he received his first monthly annuity payment on May 1, 2013. 1040 ez free He must use the Simplified Method to figure the tax-free part of his annuity benefits. 1040 ez free Bill's monthly annuity benefit is $1,000. 1040 ez free He had contributed $31,000 to his retirement plan and had received no distributions before his annuity starting date. 1040 ez free At his annuity starting date, he was 65 and Kathy was 57. 1040 ez free Bill's completed Worksheet A is shown later. 1040 ez free To complete line 3, he used Table 2 at the bottom of the worksheet and found that 310 is the number in the second column opposite the age range that includes 122 (his and Kathy's combined ages). 1040 ez free Bill keeps a copy of the completed worksheet for his records. 1040 ez free It will help him (and Kathy, if she survives him) figure the taxable amount of the annuity in later years. 1040 ez free Bill's tax-free monthly amount is $100. 1040 ez free (See line 4 of the worksheet. 1040 ez free ) If he lives to collect more than 310 monthly payments, he will generally have to include in his gross income the full amount of any annuity payments received after 310 payments have been made. 1040 ez free If Bill does not live to collect 310 monthly payments and his wife begins to receive monthly payments, she also will exclude $100 from each monthly payment until 310 payments (Bill's and hers) have been collected. 1040 ez free If she dies before 310 payments have been made, a miscellaneous itemized deduction (not subject to the 2%-of-adjusted- gross-income limit) will be allowed for the unrecovered cost on her final income tax return. 1040 ez free General Rule If your annuity starting date is after November 18, 1996, you cannot use the General Rule to figure the tax-free part of your CSRS or FERS annuity. 1040 ez free If your annuity starting date is after July 1, 1986, but before November 19, 1996, you could have chosen to use either the General Rule or the Simplified Method. 1040 ez free If your annuity starting date is before July 2, 1986, you could have chosen to use the General Rule only if you could not use the Three-Year Rule. 1040 ez free Under the General Rule, you figure the tax-free part of each full monthly payment by multiplying the initial gross monthly rate of your annuity by an exclusion percentage. 1040 ez free Figuring this percentage is complex and requires the use of actuarial tables. 1040 ez free For these tables and other information about using the General Rule, see Publication 939. 1040 ez free Three-Year Rule If your annuity starting date was before July 2, 1986, you probably had to report your annuity using the Three-Year Rule. 1040 ez free Under this rule, you excluded all the annuity payments from income until you fully recovered your cost. 1040 ez free After your cost was recovered, all payments became fully taxable. 1040 ez free You cannot use another rule to again exclude amounts from income. 1040 ez free The Three-Year Rule was repealed for retirees whose annuity starting date is after July 1, 1986. 1040 ez free Worksheet A. 1040 ez free Simplified Method for Bill Smith See the instructions in Part II of this publication under Simplified Method. 1040 ez free 1. 1040 ez free Enter the total pension or annuity payments received this year. 1040 ez free Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. 1040 ez free $ 8,000 2. 1040 ez free Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. 1040 ez free See Your cost in Part II, Rules for Retirees, earlier 2. 1040 ez free 31,000 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). 1040 ez free Otherwise, go to line 3. 1040 ez free   3. 1040 ez free Enter the appropriate number from Table 1 below. 1040 ez free But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below. 1040 ez free 3. 1040 ez free 310 4. 1040 ez free Divide line 2 by the number on line 3 4. 1040 ez free 100 5. 1040 ez free Multiply line 4 by the number of months for which this year's payments were made. 1040 ez free If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. 1040 ez free Otherwise, go to line 6 5. 1040 ez free 800 6. 1040 ez free Enter any amounts previously recovered tax free in years after 1986. 1040 ez free This is the amount shown on line 10 of your worksheet for last year 6. 1040 ez free 0 7. 1040 ez free Subtract line 6 from line 2 7. 1040 ez free 31,000 8. 1040 ez free Enter the smaller of line 5 or line 7 8. 1040 ez free 800 9. 1040 ez free Taxable amount for year. 1040 ez free Subtract line 8 from line 1. 1040 ez free Enter the result, but not less than zero. 1040 ez free Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. 1040 ez free If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. 1040 ez free If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. 1040 ez free If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. 1040 ez free $7,200 10. 1040 ez free Was your annuity starting date before 1987?   Yes. 1040 ez free Do not complete the rest of this worksheet. 1040 ez free    No. 1040 ez free Add lines 6 and 8. 1040 ez free This is the amount you have recovered tax free through 2013. 1040 ez free You will need this number if you need to fill out this worksheet next year 10. 1040 ez free 800 11. 1040 ez free Balance of cost to be recovered. 1040 ez free Subtract line 10 from line 2. 1040 ez free If zero, you will not have to complete this worksheet next year. 1040 ez free The payments you receive next year will generally be fully taxable 11. 1040 ez free $30,200 Table 1 for Line 3 Above    IF your age on your  annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. 1040 ez free Alternative Annuity Option If you are eligible, you may choose an alternative form of annuity. 1040 ez free If you make this choice, you will receive a lump-sum payment equal to your contributions to the plan and a reduced monthly annuity. 1040 ez free You are eligible to make this choice if you meet all of the following requirements. 1040 ez free You are retiring, but not on disability. 1040 ez free You have a life-threatening illness or other critical medical condition. 1040 ez free You do not have a former spouse entitled to court ordered benefits based on your service. 1040 ez free If you are not eligible or do not choose this alternative annuity, you can skip the following discussion and go to Federal Gift Tax , later. 1040 ez free Lump-Sum Payment The lump-sum payment you receive under the alternative annuity option generally has a tax-free part and a taxable part. 1040 ez free The tax-free part represents part of your cost. 1040 ez free The taxable part represents part of the earnings on your annuity contract. 1040 ez free Your lump-sum credit (discussed later) may include a deemed deposit or redeposit that is treated as being included in your lump-sum payment even though you do not actually receive such amounts. 1040 ez free Deemed deposits and redeposits, which are described later under Lump-sum credit , are taxable to you in the year of retirement. 1040 ez free Your taxable amount may therefore be more than the lump-sum payment you receive. 1040 ez free You must include the taxable part of the lump-sum payment in your income for the year you receive the payment unless you roll it over into another qualified plan or an IRA. 1040 ez free If you do not have OPM transfer the taxable amount to an IRA or other plan in a direct rollover, tax will be withheld at a 20% rate. 1040 ez free See Rollover Rules , later, for information on how to make a rollover. 1040 ez free OPM can make a direct rollover only up to the amount of the lump-sum payment. 1040 ez free Therefore, to defer tax on the full taxable amount if it is more than the payment, you must add funds from another source. 1040 ez free The taxable part of the lump-sum payment does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. 1040 ez free It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55, even if you reach age 55 in the year you receive the lump-sum payment. 1040 ez free For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. 1040 ez free Worksheet B. 1040 ez free   Use Worksheet B. 1040 ez free Lump-Sum Payment (near the end of this publication), to figure the taxable part of your lump-sum payment. 1040 ez free Be sure to keep the completed worksheet for your records. 1040 ez free   To complete the worksheet, you will need to know the amount of your lump-sum credit and the present value of your annuity contract. 1040 ez free Lump-sum credit. 1040 ez free   Generally, this is the same amount as the lump-sum payment you receive (the total of your contributions to the retirement system). 1040 ez free However, for purposes of the alternative annuity option, your lump-sum credit also may include deemed deposits and redeposits that OPM advanced to your retirement account so that you are given credit for the service they represent. 1040 ez free Deemed deposits (including interest) are for federal employment during which no retirement contributions were taken out of your pay. 1040 ez free Deemed redeposits (including interest) are for any refunds of retirement contributions that you received and did not repay. 1040 ez free You are treated as if you had received a lump-sum payment equal to the amount of your lump-sum credit and then had made a repayment to OPM of the advanced amounts. 1040 ez free Present value of your annuity contract. 1040 ez free   The present value of your annuity contract is figured using actuarial tables provided by the IRS. 1040 ez free If you are receiving a lump-sum payment under the Alternative Annuity Option, you can write to the address below to find out the present value of your annuity contract. 1040 ez free Internal Revenue Service Attn: Actuarial Group 2 TE/GE SE:T:EP:RA:T:A2 NCA-629 1111 Constitution Ave. 1040 ez free , NW Washington, DC 20224-0002 Example. 1040 ez free David Brown retired from the federal government in 2013, one month after his 55th birthday. 1040 ez free He had contributed $31,000 to his retirement plan and chose to receive a lump-sum payment of that amount under the alternative annuity option. 1040 ez free The present value of his annuity contract was $155,000. 1040 ez free The tax-free part and the taxable part of the lump-sum payment are figured using Worksheet B, as shown below. 1040 ez free The taxable part ($24,800) is also his net cost in the plan, which is used to figure the taxable part of his reduced annuity payments. 1040 ez free See Reduced Annuity , later. 1040 ez free Worksheet B. 1040 ez free Lump-Sum Payment for David Brown See the instructions in Part II of this publication under Alternative Annuity Option . 1040 ez free  1. 1040 ez free Enter your lump-sum credit (your cost in the plan at the annuity starting date) 1. 1040 ez free $ 31,000 2. 1040 ez free Enter the present value of your annuity contract 2. 1040 ez free 155,000 3. 1040 ez free Divide line 1 by line 2 3. 1040 ez free . 1040 ez free 20 4. 1040 ez free Tax-free amount. 1040 ez free Multiply line 1 by line 3. 1040 ez free (Caution: Do not include this amount on line 6 of Worksheet A in this publication. 1040 ez free ) 4. 1040 ez free $6,200 5. 1040 ez free Taxable amount (net cost in the plan). 1040 ez free Subtract line 4 from line 1. 1040 ez free Include this amount in the total on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. 1040 ez free Also, enter this amount on line 2 of Worksheet A in this publication. 1040 ez free 5. 1040 ez free $24,800   Lump-sum payment in installments. 1040 ez free   If you choose the alternative annuity option, you usually will receive the lump-sum payment in two equal installments. 1040 ez free You will receive the first installment after you make the choice upon retirement. 1040 ez free The second installment will be paid to you, with interest, in the next calendar year. 1040 ez free (Exceptions to the installment rule are provided for cases of critical medical need. 1040 ez free )   Even though the lump-sum payment is made in installments, the overall tax treatment (explained at the beginning of this discussion) is the same as if the whole payment were paid at once. 1040 ez free If the payment has a tax-free part, you must treat the taxable part as received first. 1040 ez free How to report. 1040 ez free   Add any actual or deemed payment of your lump-sum credit (defined earlier) to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. 1040 ez free Add the taxable part to the total for Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b, unless you roll over the taxable part to your traditional IRA or a qualified retirement plan. 1040 ez free    If you receive the lump-sum payment in two installments, include any interest paid with the second installment on line 8a of either Form 1040 or Form 1040A, or on line 9a of Form 1040NR. 1040 ez free Reduced Annuity If you have chosen to receive a lump-sum payment under the alternative annuity option, you also will receive reduced monthly annuity payments. 1040 ez free These annuity payments each will have a tax-free and a taxable part. 1040 ez free To figure the tax-free part of each annuity payment, you must use the Simplified Method (Worksheet A). 1040 ez free For instructions on how to complete the worksheet, see Worksheet A under Simplified Method, earlier. 1040 ez free To complete Worksheet A, line 2, you must reduce your cost in the plan by the tax-free part of the lump-sum payment you received. 1040 ez free Enter as your net cost on line 2 the amount from Worksheet B, line 5. 1040 ez free Do not include the tax-free part of the lump-sum payment with other amounts recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. 1040 ez free Example. 1040 ez free The facts are the same as in the example for David Brown in the preceding discussion. 1040 ez free In addition, David received 10 annuity payments in 2013 of $1,200 each. 1040 ez free Using Worksheet A, he figures the taxable part of his annuity payments. 1040 ez free He completes line 2 by reducing his $31,000 cost by the $6,200 tax-free part of his lump-sum payment. 1040 ez free His entry on line 2 is his $24,800 net cost in the plan (the amount from Worksheet B, line 5). 1040 ez free He does not include the tax-free part of his lump-sum payment on Worksheet A, line 6. 1040 ez free David's filled-in Worksheet A is shown on the next page. 1040 ez free Worksheet A. 1040 ez free Simplified Method for David Brown See the instructions in Part II of this publication under Simplified Method . 1040 ez free 1. 1040 ez free Enter the total pension or annuity payments received this year. 1040 ez free Also, add this amount to the total for Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a 1. 1040 ez free $ 12,000 2. 1040 ez free Enter your cost in the plan at the annuity starting date, plus any death benefit exclusion*. 1040 ez free See Your cost in Part II, Rules for Retirees, earlier 2. 1040 ez free 24,800 Note: If your annuity starting date was before this year and you completed this worksheet last year, skip line 3 and enter the amount from line 4 of last year's worksheet on line 4 below (even if the amount of your pension or annuity has changed). 1040 ez free Otherwise, go to line 3. 1040 ez free   3. 1040 ez free Enter the appropriate number from Table 1 below. 1040 ez free But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below. 1040 ez free 3. 1040 ez free 360 4. 1040 ez free Divide line 2 by the number on line 3 4. 1040 ez free 68. 1040 ez free 89 5. 1040 ez free Multiply line 4 by the number of months for which this year's payments were made. 1040 ez free If your annuity starting date was before 1987, enter this amount on line 8 below and skip lines 6, 7, 10, and 11. 1040 ez free Otherwise, go to line 6 5. 1040 ez free 688. 1040 ez free 90 6. 1040 ez free Enter any amounts previously recovered tax free in years after 1986. 1040 ez free This is the amount shown on line 10 of your worksheet for last year 6. 1040 ez free 0 7. 1040 ez free Subtract line 6 from line 2 7. 1040 ez free 24,800 8. 1040 ez free Enter the smaller of line 5 or line 7 8. 1040 ez free 688. 1040 ez free 90 9. 1040 ez free Taxable amount for year. 1040 ez free Subtract line 8 from line 1. 1040 ez free Enter the result, but not less than zero. 1040 ez free Also, add this amount to the total for Form 1040, line 16b, or Form 1040A, line 12b. 1040 ez free If you are a nonresident alien, also enter this amount on line 1 of Worksheet C. 1040 ez free If your Form CSA 1099R or Form CSF 1099R shows a larger amount, use the amount figured on this line instead. 1040 ez free If you are a retired public safety officer, see Distributions Used To Pay Insurance Premiums for Public Safety Officers in Part II before entering an amount on your tax return or Worksheet C, line 1 9. 1040 ez free $11,311. 1040 ez free 10 10. 1040 ez free Was your annuity starting date before 1987?   Yes. 1040 ez free Do not complete the rest of this worksheet. 1040 ez free    No. 1040 ez free Add lines 6 and 8. 1040 ez free This is the amount you have recovered tax free through 2013. 1040 ez free You will need this number if you need to fill out this worksheet next year 10. 1040 ez free 688. 1040 ez free 90 11. 1040 ez free Balance of cost to be recovered. 1040 ez free Subtract line 10 from line 2. 1040 ez free If zero, you will not have to complete this worksheet next year. 1040 ez free The payments you receive next year will generally be fully taxable 11. 1040 ez free $24,111. 1040 ez free 10 Table 1 for Line 3 Above    IF your age on your annuity starting date was   AND your annuity starting date was—     before November 19, 1996,  THEN enter on line 3 after November 18, 1996,  THEN enter on line 3   55 or under 300 360   56–60 260 310   61–65 240 260   66–70 170 210   71 or over 120 160  Table 2 for Line 3 Above    IF the annuitants' combined ages on your annuity starting date were   THEN enter on line 3         110 or under   410         111–120   360         121–130   310         131–140   260         141 or over   210       * A death benefit exclusion of up to $5,000 applied to certain benefits received by survivors of employees who died before August 21, 1996. 1040 ez free Reemployment after choosing the alternative annuity option. 1040 ez free If you chose this option when you retired and then you were reemployed by the Federal Government before retiring again, your Form CSA 1099R may show only the amount of your contributions to your retirement plan during your reemployment. 1040 ez free If the amount on the form does not include all your contributions, disregard it and use your total contributions to figure the taxable part of your annuity payments. 1040 ez free Annuity starting date before November 19, 1996. 1040 ez free   If your annuity starting date is before November 19, 1996, and you chose the alternative annuity option, the taxable and tax-free parts of your lump-sum payment and your annuity payments are figured using different rules. 1040 ez free Under those rules, you do not reduce your cost in the plan (Worksheet A, line 2) by the tax-free part of the lump-sum payment. 1040 ez free However, you must include that tax-free amount with other amounts previously recovered tax free (Worksheet A, line 6) when limiting your total exclusion to your total cost. 1040 ez free Federal Gift Tax If, through the exercise or nonexercise of an election or option, you provide an annuity for your beneficiary at or after your death, you have made a gift. 1040 ez free The gift may be taxable for gift tax purposes. 1040 ez free The value of the gift is equal to the value of the annuity. 1040 ez free Joint and survivor annuity. 1040 ez free   If the gift is an interest in a joint and survivor annuity where only you and your spouse can receive payments before the death of the last spouse to die, the gift generally will qualify for the unlimited marital deduction. 1040 ez free This will eliminate any gift tax liability with regard to that gift. 1040 ez free   If you provide survivor annuity benefits for someone other than your current spouse, such as your former spouse, the unlimited marital deduction will not apply. 1040 ez free This may result in a taxable gift. 1040 ez free More information. 1040 ez free   For information about the gift tax, see Publication 950, Introduction to Estate and Gift Taxes, and Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, and its instructions. 1040 ez free Retirement During the Past Year If you have recently retired, the following discussions covering annual leave, voluntary contributions, and community property may apply to you. 1040 ez free Annual leave. 1040 ez free   A payment for accrued annual leave received on retirement is a salary payment. 1040 ez free It is taxable as wages in the tax year you receive it. 1040 ez free Voluntary contributions. 1040 ez free   Voluntary contributions to the retirement fund are those made in addition to the regular contributions that were deducted from your salary. 1040 ez free They also include the regular contributions withheld from your salary after you have the years of service necessary for the maximum annuity allowed by law. 1040 ez free Voluntary contributions are not the same as employee contributions to the Thrift Savings Plan. 1040 ez free See Thrift Savings Plan , later. 1040 ez free Additional annuity benefit. 1040 ez free   If you choose to receive an additional annuity benefit from your voluntary contributions, it is treated separately from the annuity benefit that comes from the regular contributions deducted from your salary. 1040 ez free This separate treatment applies for figuring the amounts to be excluded from, and included in, gross income. 1040 ez free It does not matter that you receive only one monthly check covering both benefits. 1040 ez free Each year you will receive a Form CSA 1099R that will show how much of your total annuity received in the past year was from each type of benefit. 1040 ez free   Figure the taxable and tax-free parts of your additional monthly benefits from voluntary contributions using the rules that apply to regular CSRS and FERS annuities, as explained earlier. 1040 ez free Refund of voluntary contributions. 1040 ez free   If you choose to receive a refund of your voluntary contributions plus accrued interest, the interest is taxable to you in the tax year it is distributed unless you roll it over to a traditional IRA or another qualified retirement plan. 1040 ez free If you do not have OPM transfer the interest to a traditional IRA or other qualified retirement plan in a direct rollover, tax will be withheld at a 20% rate. 1040 ez free See Rollover Rules , later. 1040 ez free The interest does not qualify as a lump-sum distribution eligible for capital gain treatment or the 10-year tax option. 1040 ez free It also may be subject to an additional 10% tax on early distributions if you separate from service before the calendar year in which you reach age 55. 1040 ez free For more information, see Lump-Sum Distributions and Tax on Early Distributions in Publication 575. 1040 ez free Community property laws. 1040 ez free   State community property laws apply to your annuity. 1040 ez free These laws will affect your income tax only if you file a return separately from your spouse. 1040 ez free   Generally, the determination of whether your annuity is separate income (taxable to you) or community income (taxable to both you and your spouse) is based on your marital status and domicile when you were working. 1040 ez free Regardless of whether you are now living in a community property state or a noncommunity property state, your current annuity may be community income if it is based on services you performed while married and domiciled in a community property state. 1040 ez free   At any time, you have only one domicile even though you may have more than one home. 1040 ez free Your domicile is your fixed and permanent legal home that you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. 1040 ez free The question of your domicile is mainly a matter of your intentions as indicated by your actions. 1040 ez free   If your annuity is a mixture of community income and separate income, you must divide it between the two kinds of income. 1040 ez free The division is based on your periods of service and domicile in community and noncommunity property states while you were married. 1040 ez free   For more information, see Publication 555, Community Property. 1040 ez free Reemployment After Retirement If you retired from federal service and are later rehired by the Federal Government as an employee, you can continue to receive your annuity during reemployment. 1040 ez free The employing agency usually will pay you the difference between your salary for your period of reemployment and your annuity. 1040 ez free This amount is taxable as wages. 1040 ez free Your annuity will continue to be taxed just as it was before. 1040 ez free If you are still recovering your cost, you continue to do so. 1040 ez free If you have recovered your cost, the annuity you receive while you are reemployed generally is fully taxable. 1040 ez free Nonresident Aliens The following special rules apply to nonresident alien federal employees performing services outside the United States and to nonresident alien retirees and beneficiaries. 1040 ez free A nonresident alien is an individual who is not a citizen or a resident alien of the United States. 1040 ez free Special rule for figuring your total contributions. 1040 ez free   Your contributions to the retirement plan (your cost) also include the government's contributions to the plan to a certain extent. 1040 ez free You include government contributions that would not have been taxable to you at the time they were contributed if they had been paid directly to you. 1040 ez free For example, government contributions would not have been taxable to you if, at the time made, your services were performed outside the United States. 1040 ez free Thus, your cost is increased by these government contributions and the benefits that you, or your beneficiary, must include in income are reduced. 1040 ez free   This method of figuring your total contributions does not apply to any contributions the government made on your behalf after you became a citizen or a resident alien of the United States. 1040 ez free Limit on taxable amount. 1040 ez free   There is a limit on the taxable amount of payments received from the CSRS, the FERS, or the TSP by a nonresident alien retiree or nonresident alien beneficiary. 1040 ez free Figure this limited taxable amount by multiplying the otherwise taxable amount by a fraction. 1040 ez free The numerator of the fraction is the retiree's total U. 1040 ez free S. 1040 ez free Government basic pay, other than tax-exempt pay for services performed outside the United States. 1040 ez free The denominator is the retiree's total U. 1040 ez free S. 1040 ez free Government basic pay for all services. 1040 ez free    Basic pay includes regular pay plus any standby differential. 1040 ez free It does not include bonuses, overtime pay, certain retroactive pay, uniform or other allowances, or lump-sum leave payments. 1040 ez free   To figure the limited taxable amount of your CSRS or FERS annuity or your TSP distributions, use Worksheet C. 1040 ez free (For an annuity, first complete Worksheet A in this publication. 1040 ez free ) Worksheet C. 1040 ez free Limited Taxable Amount for Nonresident Alien 1. 1040 ez free Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. 1040 ez free   2. 1040 ez free Enter the total U. 1040 ez free S. 1040 ez free Government basic pay other than tax-exempt pay for services performed outside the United States 2. 1040 ez free   3. 1040 ez free Enter the total U. 1040 ez free S. 1040 ez free Government basic pay for all services 3. 1040 ez free   4. 1040 ez free Divide line 2 by line 3 4. 1040 ez free   5. 1040 ez free Limited taxable amount. 1040 ez free Multiply line 1 by line 4. 1040 ez free Enter this amount on Form 1040NR, line 17b 5. 1040 ez free   Example 1. 1040 ez free You are a nonresident alien who performed all services for the U. 1040 ez free S. 1040 ez free Government abroad as a nonresident alien. 1040 ez free You retired and began to receive a monthly annuity of $200. 1040 ez free Your total basic pay for all services for the U. 1040 ez free S. 1040 ez free Government was $100,000. 1040 ez free All of your basic pay was tax exempt because it was not U. 1040 ez free S. 1040 ez free source income. 1040 ez free The taxable amount of your annuity using Worksheet A in this publication is $720. 1040 ez free You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. 1040 ez free Worksheet C. 1040 ez free Limited Taxable Amount for Nonresident Alien — Example 1 1. 1040 ez free Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. 1040 ez free $ 720 2. 1040 ez free Enter the total U. 1040 ez free S. 1040 ez free Government basic pay other than tax-exempt pay for services performed outside the United States 2. 1040 ez free 0 3. 1040 ez free Enter the total U. 1040 ez free S. 1040 ez free Government basic pay for all services 3. 1040 ez free 100,000 4. 1040 ez free Divide line 2 by line 3 4. 1040 ez free 0 5. 1040 ez free Limited taxable amount. 1040 ez free Multiply line 1 by line 4. 1040 ez free Enter this amount on Form 1040NR, line 17b 5. 1040 ez free 0 Example 2. 1040 ez free You are a nonresident alien who performed services for the U. 1040 ez free S. 1040 ez free Government as a nonresident alien both within the United States and abroad. 1040 ez free You retired and began to receive a monthly annuity of $240. 1040 ez free Your total basic pay for your services for the U. 1040 ez free S. 1040 ez free Government was $120,000; $40,000 was for work done in the United States and $80,000 was for your work done in a foreign country. 1040 ez free The part of your total basic pay for your work done in a foreign country was tax exempt because it was not U. 1040 ez free S. 1040 ez free source income. 1040 ez free The taxable amount of your annuity figured using Worksheet A in this publication is $1,980. 1040 ez free You are a nonresident alien, so you figure the limited taxable amount of your annuity using Worksheet C as follows. 1040 ez free Worksheet C. 1040 ez free Limited Taxable Amount for Nonresident Alien — Example 2 1. 1040 ez free Enter the otherwise taxable amount of the CSRS or FERS annuity (from line 9 of Worksheet A or from Forms CSA 1099R or CSF 1099R) or TSP distributions (from Form 1099R) 1. 1040 ez free $ 1,980 2. 1040 ez free Enter the total U. 1040 ez free S. 1040 ez free Government basic pay other than tax-exempt pay for services performed outside the United States 2. 1040 ez free 40,000 3. 1040 ez free Enter the total U. 1040 ez free S. 1040 ez free Government basic pay for all services 3. 1040 ez free 120,000 4. 1040 ez free Divide line 2 by line 3 4. 1040 ez free . 1040 ez free 333 5. 1040 ez free Limited taxable amount. 1040 ez free Multiply line 1 by line 4. 1040 ez free Enter this amount on Form 1040NR, line 17b 5. 1040 ez free 659 Thrift Savings Plan Generally, all of the money in your TSP account is taxed as ordinary income when you receive it. 1040 ez free (However, see Roth TSP balance and Uniformed services TSP accounts, next. 1040 ez free ) This is because neither the contributions to your traditional TSP balance nor its earnings have been included previously in your taxable income. 1040 ez free The way that you withdraw your account balance determines when you must pay the tax. 1040 ez free Roth TSP balance. 1040 ez free   The TSP also offers a Roth TSP option, which allows you to make after-tax contributions into your TSP account. 1040 ez free This means Roth TSP contributions are included in your income. 1040 ez free The contribution limits are the same as the traditional TSP. 1040 ez free You can elect to have part or all of your TSP contributions designated as a Roth TSP. 1040 ez free Agency contributions will be part of your traditional TSP balance. 1040 ez free Also, you cannot roll over any portion of your traditional TSP into your Roth TSP. 1040 ez free   Qualified distributions from your Roth TSP are not included in income. 1040 ez free This applies to both your cost in the account and income earned on that account. 1040 ez free A qualified distribution is generally a distribution that is: Made after a 5-tax-year period of participation, and Made on or after the date you reach age 59½, made to a beneficiary or your estate on or after your death, or attributable to your being disabled. 1040 ez free   For more information, go to the TSP website, www. 1040 ez free tsp. 1040 ez free gov, or the TSP Service Office. 1040 ez free See Publication 575, Pension and Annuity Income, for more information about designated Roth accounts. 1040 ez free Uniformed services TSP accounts. 1040 ez free   If you have a uniformed services TSP account that includes contributions from combat zone pay, the distributions attributable to those contributions are tax exempt. 1040 ez free However, any earnings on those contributions to a traditional TSP balance are subject to tax when they are distributed. 1040 ez free See Roth TSP balance discussed previously to get more information about Roth contributions. 1040 ez free The statement you receive from the TSP will separately state the total amount of your distribution and the amount of your taxable distribution for the year. 1040 ez free You can get more information from the TSP website, www. 1040 ez free tsp. 1040 ez free gov, or the TSP Service Office. 1040 ez free Direct rollover by the TSP. 1040 ez free   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a traditional IRA or other qualified retirement plan, the tax on that part is deferred until you receive payments from the traditional IRA or other plan. 1040 ez free However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. 1040 ez free Also, see Rollover Rules , later. 1040 ez free Direct rollover by the TSP to a Roth IRA. 1040 ez free   If you ask the TSP to transfer any part of the money in your account, from traditional contributions and its earnings, to a Roth IRA, the amount transferred will be taxed in the current year. 1040 ez free However, see the following Note for a discussion on direct rollovers by the TSP of Roth contributions and its earnings. 1040 ez free Also, see Rollovers to Roth IRAs for more information, later. 1040 ez free Note. 1040 ez free A direct rollover of your Roth contributions and its earnings (if certain conditions are met, see Roth TSP balance , earlier) in your TSP account to a Roth 401(k), Roth 403(b), Roth 457(b), or Roth IRA are not subject to tax when they are transferred or when you receive payments from those accounts at a later date. 1040 ez free This is because you already paid tax on those contributions. 1040 ez free You cannot rollover Roth contributions and its earnings in your TSP account to a traditional IRA. 1040 ez free TSP annuity. 1040 ez free   If you ask the TSP to buy an annuity with the money in your account, from traditional contributions and its earnings, the annuity payments are taxed when you receive them. 1040 ez free The payments are not subject to the additional 10% tax on early distributions, even if you are under age 55 when they begin. 1040 ez free However, there is no tax on the annuity payments if the annuity is purchased using the money in your account from Roth contributions and its earnings if certain conditions are met. 1040 ez free See Roth TSP balance , earlier. 1040 ez free This is because you already paid tax on those contributions. 1040 ez free Cash withdrawals. 1040 ez free   If you withdraw any of the money in your TSP account, from traditional contributions and its earnings, it is generally taxed as ordinary income when you receive it unless you roll it over into a traditional IRA or other qualified plan. 1040 ez free (See Rollover Rules , later. 1040 ez free ) If you receive your entire TSP account balance in a single tax year, you may be able to use the 10-year tax option to figure your tax. 1040 ez free See Lump-Sum Distributions in Publication 575 for details. 1040 ez free However, there is no tax if you withdraw money in your TSP account from Roth contributions and its earnings if certain conditions are met. 1040 ez free See Roth TSP balance , earlier. 1040 ez free    To qualify for the 10-year tax option, the plan participant must have been born before January 2, 1936. 1040 ez free   If you receive a single payment or you choose to receive your account balance in monthly payments over a period of less than 10 years, the TSP generally must withhold 20% for federal income tax. 1040 ez free If you choose to receive your account balance in monthly payments over a period of 10 or more years or a period based on your life expectancy, the payments are subject to withholding as if you are married with three withholding allowances, unless you submit a withholding certificate. 1040 ez free See also Withholding from Thrift Savings Plan payments earlier under Tax Withholding and Estimated Tax in Part I. 1040 ez free However, there is no withholding requirement for amounts withdrawn from your TSP account that is from Roth contributions and its earnings, if certain conditions are met. 1040 ez free See Roth TSP balance , earlier, for a discussion of those conditions. 1040 ez free Tax on early distributions. 1040 ez free   Any money paid to you from your TSP account before you reach age 59½ may be subject to an additional 10% tax on early distributions. 1040 ez free However, this additional tax does not apply in certain situations, including any of the following. 1040 ez free You receive the distribution and separate from government service during or after the calendar year in which you reach age 55. 1040 ez free You choose to receive your account balance in monthly payments based on your life expectancy. 1040 ez free You are totally and permanently disabled. 1040 ez free You receive amounts from your Roth contributions since that represents a return of your cost (after-tax money). 1040 ez free The earnings may be subject to the 10% tax depending on whether you met certain conditions. 1040 ez free See Roth TSP balance , earlier. 1040 ez free   For more information, see Tax on Early Distributions in Publication 575. 1040 ez free Outstanding loan. 1040 ez free   If the TSP declares a distribution from your account because money you borrowed has not been repaid when you separate from government service, your account is reduced and the amount of the distribution (your unpaid loan balance and any unpaid interest), from traditional contributions and its earnings, is taxed in the year declared. 1040 ez free The distribution also may be subject to the additional 10% tax on early distributions. 1040 ez free However, the tax will be deferred if you make a rollover contribution to a traditional IRA or other qualified plan equal to the declared distribution amount. 1040 ez free See Rollover Rules , later. 1040 ez free   If you withdraw any money from your TSP account in that same year, the TSP must withhold income tax of 20% of the total of the declared distribution and the amount withdrawn. 1040 ez free However, no withholding is required for portions of the distribution that is from Roth contributions and its earnings, if certain conditions are met. 1040 ez free See Roth TSP balance , earlier. 1040 ez free More information. 1040 ez free   For more information about the TSP, see Summary of the Thrift Savings Plan, distributed to all federal employees. 1040 ez free Also, see Important Tax Information About Payments From Your TSP Account and Special Tax Withholding Rules for Thrift Savings Plan Payments to Nonresident Aliens, which are available from your agency personnel office or from the TSP by calling 1-TSP-YOU-FIRST (1-877-968-3778) and for participants who are deaf, hard of hearing, or have a speech disability, call 1-TSP-THRIFT5 (1-877-847-4385). 1040 ez free    The above documents are also available on the TSP website at www. 1040 ez free tsp. 1040 ez free gov. 1040 ez free Select “Forms & Publications. 1040 ez free ” Rollover Rules Generally, a rollover is a tax-free withdrawal of cash or other assets from one qualified retirement plan or traditional IRA and its reinvestment in another qualified retirement plan or traditional IRA. 1040 ez free You do not include the amount rolled over in your income, and you cannot take a deduction for it. 1040 ez free The amount rolled over is taxed later as the new program pays that amount to you. 1040 ez free If you roll over amounts into a traditional IRA, later distributions of these amounts from the traditional IRA do not qualify for the capital gain or the 10-year tax option. 1040 ez free However, capital gain treatment or the 10-year tax option will be restored if the traditional IRA contains only amounts rolled over from a qualified plan and these amounts are rolled over from the traditional IRA into a qualified retirement plan. 1040 ez free To qualify for the capital gain treatment or 10-year tax option, the plan participant must have been born before January 2, 1936. 1040 ez free You can also roll over a distribution from a qualified retirement plan into a Roth IRA. 1040 ez free Although the transfer of a distribution into a Roth IRA is considered a rollover for Roth IRA purposes, it is not a tax-free transfer unless you are rolling over amounts from Roth contributions and its earnings. 1040 ez free See Rollovers to Roth IRAs , later, for more information. 1040 ez free Qualified retirement plan. 1040 ez free   For this purpose, a qualified retirement plan generally is: A qualified employee plan, A qualified employee annuity, A tax-sheltered annuity plan (403(b) plan), or An eligible state or local government section 457 deferred compensation plan. 1040 ez free The CSRS, FERS, and TSP are considered qualified retirement plans. 1040 ez free Distributions eligible for rollover treatment. 1040 ez free   If you receive a refund of your CSRS or FERS contributions when you leave government service, you can roll over any interest you receive on the contributions. 1040 ez free You cannot roll over any part of your CSRS or FERS annuity payments. 1040 ez free   You can roll over a distribution of any part of your TSP account balance except: A distribution of your account balance that you choose to receive in monthly payments over: Your life expectancy, The joint life expectancies of you and your beneficiary, or A period of 10 years or more, A required minimum distribution generally beginning at age 70½, A declared distribution because of an unrepaid loan, if you have not separated from government service (see Outstanding loan under Thrift Savings Plan, earlier), or A hardship distribution. 1040 ez free   In addition, a distribution to your beneficiary generally is not treated as an eligible rollover distribution. 1040 ez free However, see Qualified domestic relations order (QDRO) and Rollovers by surviving spouse , and Rollovers by nonspouse beneficiary , later. 1040 ez free Direct rollover option. 1040 ez free   You can choose to have the OPM or TSP transfer any part of an eligible rollover distribution directly to another qualified retirement plan that accepts rollover distributions or to a traditional IRA or Roth IRA. 1040 ez free   There is an automatic rollover requirement for mandatory distributions. 1040 ez free A mandatory distribution is a distribution made without your consent and before you reach age 62 or normal retirement age, whichever is later. 1040 ez free The automatic rollover requirement applies if the distribution is more than $1,000 and is an eligible rollover distribution. 1040 ez free You can choose to have the distribution paid directly to you or rolled over directly to your traditional or Roth IRA or another qualified retirement plan. 1040 ez free If you do not make this choice, OPM will automatically roll over the distribution into an IRA of a designated trustee or issuer. 1040 ez free No tax withheld. 1040 ez free   If you choose the direct rollover option or have an automatic rollover, no tax will be withheld from any part of the distribution that is directly paid to the trustee of the other plan. 1040 ez free However, if the rollover is to a Roth IRA, you may want to choose to have tax withheld since any amount rolled over is generally included in income. 1040 ez free Any part of the eligible rollover distribution paid to you is subject to withholding at a 20% rate. 1040 ez free Direct roll over amounts from Roth contributions and its earnings do not have tax withheld because you already paid tax on those amounts. 1040 ez free Payment to you option. 1040 ez free   If an eligible rollover distribution is paid to you, the OPM or TSP must withhold 20% for income tax even if you plan to roll over the distribution to another qualified retirement plan, traditional or Roth IRA. 1040 ez free However, the full amount is treated as distributed to you even though you actually receive only 80%. 1040 ez free You generally must include in income any part (including the part withheld) that you do not roll over within 60 days to another qualified retirement plan or to a traditional IRA. 1040 ez free Rollovers to Roth IRAs are generally included in income. 1040 ez free Eligible rollover distributions that are from Roth contributions do not have tax withheld because you already paid tax on those amounts. 1040 ez free If you leave government service before the calendar year in which you reach age 55 and are under age 59½ when a distribution is paid to you, you may have to pay an additional 10% tax on any part, including any tax withheld, that you do not roll over. 1040 ez free However, distributions from Roth contributions will not be subject to the 10% additional tax because it is a return of your cost (after-tax money). 1040 ez free Earnings from those contributions may be subject to the 10% additional tax if certain conditions are not met. 1040 ez free See Roth TSP balance , earlier. 1040 ez free Also, see Tax on Early Distributions in Publication 575. 1040 ez free Exception to withholding. 1040 ez free   Withholding from an eligible rollover distribution paid to you is not required if the distributions for your tax year total less than $200. 1040 ez free Partial rollovers. 1040 ez free   A lump-sum distribution may qualify for capital gain treatment or the 10-year tax option if the plan participant was born before January 2, 1936. 1040 ez free See Lump-Sum Distributions in Publication 575. 1040 ez free However, if you roll over any part of the distribution, the part you keep does not qualify for this special tax treatment. 1040 ez free Rolling over more than amount received. 1040 ez free   If you want to roll over more of an eligible rollover distribution than the amount you received after income tax was withheld, you will have to add funds from some other source (such as your savings or borrowed amounts). 1040 ez free Example. 1040 ez free You left government service at age 53. 1040 ez free On February 1, 2013, you receive an eligible rollover distribution of $10,000 from you